Future Freight Networks the Alc Yearbook 2010

FUTURE FREIGHT NETWORKS THE ALC YEARBOOK 2010

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1300 135 463 www.lindemh.com.au CONTENTS

FOREWORD FROM THE CHAIRMAN 2

ALC MEMBERS 3

ALC 2010 COMMITTEE STRUCTURE AND BOARD 4

ALC 2011 FORUM – MELBOURNE 5

ABOUT ALC 6

ALC OBJECTIVES, STRATEGIES AND ACTIONS FOR 2010 9

TRENDS RESHAPING THE SUPPLY CHAIN & LOGISTICS LANDSCAPE IN AUSTRALIA BY MICHAEL KILGARIFF 10

NATIONAL TRANSPORT POLICY FRAMEWORK 2010 – INCORPORATING THE NATIONAL PORTS STRATEGY AND NATIONAL FREIGHT NETWORK PLAN 20

NATIONAL FREIGHT NETWORK PLAN SHOULD FOCUS ON ‘NATIONALLY SIGNIFICANT’ INFRASTRUCTURE 30

SHAPING MELBOURNE’S FREIGHT FUTURE: TOWARDS AN INTERMODAL FREIGHT FUTURE FOR MELBOURNE 38 Published by THE NEW AUSTRALIA: YOU’RE STANDING IN IT BY PHILIP HALTON 41

MULTIMODAL INTERSTATE FREIGHT IN AUSTRALIA – RESEARCH REPORT 120 45 Executive Media Pty Ltd SAFETY CODES UNDERPIN INDUSTRY ACCOUNTABILITY AND BEST PRACTICE 50 430 William Street, Melbourne VIC 3000 Tel: (03) 9274 4200 Fax: (03) 9329 5295 SMART SUPPLY CHAINS FOR COST AND CARBON SAVINGS 55 Email: [email protected] Web: www.executivemedia.com.au PORT OPERATORS: A SHIP SHAPE INDUSTRY RESHAPES 59 STATE OF AUSTRALIAN CITIES 2010 64 The editor, publisher, printer and their staff and agents are not responsible for the accuracy or correctness of the text DRIVING A SEAMLESS SUPPLY CHAIN – PROCEEDINGS FROM THE 2010 ALC ANNUAL of contributions contained in this publication or for the FORUM 68 consequences of any use made of the products, and the information referred to in this publication. The editor, KEYNOTE ADDRESS publisher, printer and their staff and agents expressly disclaim all liability of whatsoever nature for any BY THE HON ANTHONY ALBANESE 68 consequences arising from any errors or omissions contained in this publication whether caused to a purchaser LET’S NOT REINVENT THE WHEEL, BUT LEARN FROM OTHERS of this publication or otherwise. The views expressed in the BY HELEN NEWELL 74 articles and other material published herein do not necessarily reﬂect the views of the editor and publisher or NATIONAL PARTNERSHIP AGREEMENT TO DELIVER A SEAMLESS NATIONAL ECONOMY their staff or agents. The responsibility for the accuracy of BY PAUL MCCLINTOCK AO 80 information is that of the individual contributors and neither the publisher nor editor can accept responsibility for the THE NEXT BIG THING IN TRANSPORT accuracy of information which is supplied by others. It is BY NICK DIMOPOULOS 86 impossible for the publisher and editors to ensure that the advertisements and other material herein comply with the HOW COMPETITION LAW SUPPORTS TRANSPORT AND LOGISTICS SOLUTIONS Trade Practices Act 1974 (CTH). Readers should make their own enquiries in making any decisions, and where BY GRAEME SAMUEL 91 necessary, seek professional advice. MEETING AUSTRALIA’S FREIGHT INFRASTRUCTURE CHALLENGE © 2010 Executive Media Pty Ltd. Reproduction in whole or BY BRENDAN LYON 97 in part without written permission is strictly prohibited.

1 FOREWORD FROM THE CHAIRMAN

As the Chairman of the Australian Logistics Council (ALC), I am pleased to launch the ﬁrst edition of FUTURE FREIGHT NETWORKS—the ALC Yearbook 2010.

ALC is the main advocate for Our number one objective is to Australia’s freight Transport & ensure Governments at all Logistics (T&L) industry. ALC levels hear and act on the influences all Governments’ advice from the major policy decisions to ensure that participants in Australia’s Australia has a safe, secure, domestic and international reliable, sustainable and freight T&L supply chains. competitive freight T&L It is important for ALC to industry. This is important participate in the many supply because our members have chain initiatives currently being interests across the full put forward by Government. spectrum of the Australian These include the national freight T&L supply chain, transport regulatory reform including owners, providers agenda and the development and users of infrastructure. of a National Freight Network Plan. I have many years of experience in T&L and I have ALC will make its presence felt observed many changes, in in both of these regulatory and particular the move away from infrastructure areas and it is a focus on individual aspects of critical we deliver the right the transport chain to the message. management and efficiencies of the whole supply chain. I therefore commend this publication to you and would Our Governments are welcome any feedback on increasingly looking for a view issues that should be that reflects the depth of our considered by ALC in the industry and the efficiency of future. the total supply chain. It is that perspective which makes ALC unique with members across the full spectrum of the Best wishes Australian freight and supply Don Telford chain. Chairman

2 July 2010

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3 ALC 2010 Committee Structure

ALC BOARD ALC ALC Board Chairman of Governors

Membership Infrastructure Regulation Safety & Finance Policy Committee Policy Committee Policy Committee Committee

Working National Logistics Safety Code Groups Retail Logistics Chain Code of Conduct

ALC 2010 Board

Don Telford Chairman Australian Logistics Council

Ian Murray AM Deputy Chairman and Executive Director Australian Institute of Export Ltd

Helen Newell Director Corporate Development and Government Relations Asciano Limited

Ingilby Dickson General Manager Supply Chain and Logistics BlueScope Steel

Tania Whyte President Commercial Linfox Logistics

Dom Figliomeni CEO Port Kembla Port Corporation

Stephen Cleary Group General Manager – Freight QANTAS Airways

Michael Carter Executive Vice President & CEO QR National Network Services Pty Ltd

Andrew Ethell General Manager Group Corporate Affairs Toll Group

Daryll Hull Managing Director Transport and Logistics Centre

Tony Sheldon Federal Secretary Transport Workers Union

John Begley Chairman Victorian Freight and Logistics Council

Michael Haines Advisory Board Member Westgate Ports

Paul Larsen CEO WestNet Rail

Michael Kilgariff CEO Australian Logistics Council

4 ALC ANNUAL FORUM 2011 – FREIGHT NETWORKS FOR THE FUTURE MELBOURNE CONVENTION & EXHIBITION CENTRE, MONDAY 21 - TUESDAY 22 FEBRUARY 2011 The ALC Annual Forum is the ALC’s premier annual event and will be one of the biggest gatherings of senior leaders of the T&L Industry in 2011.

The 2011 ALC Annual Forum will be held at the Melbourne Convention & Exhibition Centre, Monday 21 February - Tuesday 22 February 2011. The theme is “Freight Networks for the Future”.

The Forum will include a CEO’s Plenary session on “Freight Networks for the Future”. Key speakers confirmed so far include: » Paul Little, Managing Director – Toll Group. » Mike Mrdak, Chief Executive Officer – Department of Infrastructure, Transport, Regional Development and Local Government. » Ahmed Fahour, Managing Director & CEO – Australia Post » Michal Byrne, Chief Executive Officer – Linfox Pty Ltd. » Mark Rowsthorn, Managing Director & CEO – Asciano Ltd » Lance Hockridge, Chief Executive Officer – QR Limited. » Don Telford, Chairman – Australian Logistics Council. The 2011 ALC Forum will focus on Australia’s freight task. The 2011 Forum will explore progress over 2010 as the year of freight transport and focus on what will need to happen in 2011, as well as provide an opportunity for the industry to showcase the latest technology, products and services.

ALC is particularly mindful of the commitment that sponsorship entails and has designed the sponsorship packages to provide a range of signiﬁcant beneﬁts and exposure, both in the conference promotional material and during the event itself.

The ALC Forum is organised by and for Australia’s freight T&L industry; if you are involved, you need to be there.

For all sponsorship enquiries, please contact Natasha Diduk on Ph (02) 6260 4915 or [email protected].

OFFICIAL MEDIA PARTNER

FREIGHT NETWORKS FOR THE FUTURE

Contact Exhibition and Sponsorship Opportunities Available Natasha Diduk Office/Event Manager on P: +61 2 6260 4915 E: [email protected] Featuring a CEO’s Plenary session on “Freight Networks for the Future”, with » Michael Byrne, Chief Executive Officer – Linfox Pty Ltd. » Ahmed Fahour, Managing Director & CEO – Australia Post » Lance Hockridge, Chief Executive Officer – QR National

21-22 FEB » Paul Little, Managing Director – Toll Group. » Mike Mrdak, Chief Executive Ofﬁcer – Department of Infrastructure, Transport,

MELBOURNE Regional Development and Local Government. » Mark Rowsthorn, Managing Director & CEO – Asciano Ltd » Don Telford, Chairman – Australian Logistics Council.

WWW.AUSTLOGISTICS.COM.AU CLICK ON ALC FORUM 2011 LINK FOR MORE DETAILS

5 AAbAboAboutbooutut ALALCC

ALC MISSION STTAAATTEMENTTT,, AIM AND STRAATTEGIC OBJECTIVES

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STRAATTEGIC POSITIONING

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www.joneslanglasalle.com.au ECONOMIC POSITIONING

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BACKGROUND ON ALC

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8 ALC Objectives, Strategies and Actions for 2010

OBJECTIVES STRATEGIES ACTIONS

1. Be the Position ALC with » Use the ALC National Strategy for the Transport and Logistics Freight Industry—Enhancing nationally Government, Australia’s Supply Chains 2008 2015 as the basis for advocacy across: recognised voice industry » Safety—T&L Vision Zero. of the major stakeholders and » Investment. participants in media as the » Regulatory Reform. Australia’s peak national » People. domestic and body for » Energy & Environment. international Australia’s major » Innovation and Technology. freight transport freight Transport » Leadership. and logistics & Logistics supply chains. industry owners, » Prepare ALC Policy document A Seamless Economy: A Seamless Supply Chain setting out the next providers, users steps in the reform of the Australian Transport and Logistics Industry, e.g. a Single Land Transport and suppliers. Regulator with a seamless regulatory approach across all transport modes. » ALC to communicate 2010 Strategic Plan to members, prospective members and key government stakeholders. » Conduct a survey in late 2010 on members’ expectations of ALC, how external stakeholders view ALC and future opportunities for ALC. Results to feed into an ALC Strategic Planning session in early 2011.

2. Support Engage with » Advocacy and support for the national transport policy and regulatory reform agenda being driven appropriate CoAG, ATC by the Council of Australian Governments (CoAG) and ministers of the Australian Transport Council nationally Ministers, and (ATC). consistent their » Advocacy and submissions on the National Ports Strategy, the National Freight Network Plan, and regulatory Departments to the National Transport Policy Framework being developed by Infrastructure Australia and National frameworks and advocate a Transport Commission. transparent national markets to approach to the » Capital City Strategic Planning Systems—CoAG has agreed to national objectives and criteria for ensure Australia Australian the future strategic planning of Australia’s capital cities. enjoys the full transport » ALC to ensure capital city strategic planning systems take into account transport and logistics beneﬁts of industry. issues. national freight » Promote the adoption and development of safety best practices in Transport and Logistics through transport and the National Logistics Safety Code (NLSC) and Retail Logistics Supply Chain Code of Conduct logistics policy (RLSC). development and reform. » Advocate ALC Reports on: » Cross Border Regulation in Australia » Australia’s supply chains—ﬁxing the blockages. Advancing Australia’s Competitiveness.

3. Promote the Engage with ALC » Manage the Women Moving Forward Program. Freight T&L Members and » Work closely with the Australian Freight Council Network and state freight councils. industry’s image stakeholders to and proﬁle and inﬂuence » Establish forum with the Department of Infrastructure and Transport with T&L sectoral associations. encourage perceptions of » Decision Makers Dinners with jurisdictional Ministers for Transport: greater the freight T&L » One dinner in each state and territory—to be open to all ALC members. Non-members to pay recognition by sector. premium for attendance. governments and » Two Chairman’s Dinners with Commonwealth Minister for Transport—invitation list to be at the community of discretion of Chairman. the importance of the industry’s » At opportune times promote outcomes of ALC document Who Moves Australia—Workforce contribution to participation in Australian Transport and Logistics. Australia’s economy.

4. Drive Promote effective » Release and advocacy of Discussion Paper on A Smarter Supply Chain—Using Information and implementation of and efﬁcient Communications Technology (ICT) to Increase Productivity in the Australian Transport Logistics strategies to supply chains in Industry. improve Australia through » ALC to Develop ALC Position Paper on A Smarter Supply Chain. Australia’s regulatory reform domestic and and appropriate » Development of ALC Discussion Paper on the role of competition policy in a seamless supply chain. international infrastructure » Purpose is to analyse government/ACCC requirements around cooperation and information, supply chains. investment, which creates uncertainty and is a constraint on a seamless supply chain. including by » Future Supply Chain 2020 Project—role of collaboration in the organisation and operation of Future maximising the Supply Chains that will deliver sustainable Collaboration and Future Supply Chain business models. use of our existing supply chains.

9 TRENDS RESHAPING THE SUPPLY CHAIN & LOGISTICS LANDSCAPE IN AUSTRALIA

The importance of Australia’s Transport & Logistics (T&L) industry has been brought squarely into focus by the Australian Logistics Council.

Michael Kilgariff CEO Australian Logistics Council

As the peak national body for Australia’s freight T&L industry, Australia enjoys the full benefits of national freight T&L policy the ALC aims to influence government policy decisions to development and reform. ALC also promotes the freight T&L ensure a safe, secure, reliable, sustainable and competitive industry’s image and profile and encourages greater freight T&L industry. recognition by governments and the community of the importance of the industry’s contribution to Australia’s This positioning of the ALC as the nationally recognised voice economy. of the major participants in Australia’s freight supply chains, is pivotal in underpinning national growth. ALC estimates that for every one per cent increase in T&L efficiency, approximately $1.5 billion is saved from Australia’s Work undertaken by ALC on the contribution of freight logistics national accounts. to the Australian economy suggests it generates 14.5% of Australia’s GDP and provides more than 1 million jobs across Australia’s freight task has more than doubled over the last 20 165,000 companies. years and is expected to almost double again by 2020. Our industry allies at Infrastructure Partnership Australia estimate ALC members have interests across the full spectrum of the the freight task is set to triple by 2050. Australian freight T&L supply chain, including owners, providers and users of infrastructure, as well as suppliers of goods and The role for ALC in advocating greater efficiencies in the T&L services. supply chain is critically imperative given recent Treasury estimates that Australia’s population could increase to 35 ALC works to support appropriate nationally consistent million by 2050. regulatory frameworks and transparent markets to ensure CONTINUED ON PAGE 12

10 Open for Business

Why send your freight for an eastern states stopover when you can fly direct between Adelaide and your key international suppliers and customers? s More than 10,000 tonnes of cargo with a value of more than $300 million exported annually to international destinations direct from Adelaide Airport s More than 30 international flights a week to and from Asia Pacific destinations for import and export s A dedicated Singapore Airlines 747 freighter service to and from Singapore every week s Excellent connections through major freight hubs including Singapore and Hong Kong s Considerable time-savings on traditional freight export and import routes There are two major developments under way in the freight T&L Rather, the function of the National Freight Plan should be to industry that will shape the trends in the industry for some time. ensure the estimated freight task anticipated at a given time in Firstly, there is the national transport regulatory policy the future (say 20 years) can be met. framework being developed by the Council of Australian Governments (COAG) and the Australian Transport Council. Thus, the National Freight Plan will be integral to ensuring there is adequate infrastructure for the efficient operation of a Secondly, Infrastructure Australia and the National Transport logistics chain capable of handling the anticipated freight effort. Commission are also developing a National Freight Network Plan, a National Port Strategy, and ultimately a National Crucial to this task is properly identified and supported Transport Policy Framework. nationally significant infrastructure. However, achieving consensus on what constitutes Nationally significant At its December 2009 meeting, COAG agreed to the infrastructure remains a challenge. implementation of a number of initatives over the next 3 years including, a national rail safety regulator in Adelaide, a marine The ALC view is that Nationally Significant Infrastructure should have regard to the size and importance of the infrastructure to safety authority in Canberra and a National Heavy Vehicle the national economy. Regulator in Brisbane. Nationally Significant Infrastructure should also include inland COAG also agreed to examine various models of road pricing ports or intermodal facilities. The Intermodal solution can be and funding, to be completed by December 2011, which defined as ‘the combined use of rail and road modes for the should include specific consideration of mass-distance location transport of containerised freight, with rail generally carrying out pricing. The outcomes of the feasibility study will help the longer distance ‘line-haul’ leg of the journey and road determine whether direct pricing is feasible. undertaking the shorter ‘pick up and delivery’ leg at each end’. In another major initiative, COAG also agreed that by 1 January Decisions on these facilities should have regard to competition 2012, all States will have in place plans that meet new national principles; cost-benefit analysis; and the connection between criteria for capital city strategic planning systems. This may and the port and freight destinations. should have major ramifications for the protection of freight corridors through and around cities. In this respect, the ALC has applauded Victorian Roads and Ports Minister Tim Pallas, for releasing the Shaping Given that amount of work going on in the background of the Melbourne’s Freight Future Discussion Paper in April, which industry, ALC was delighted in January this year when the proposes to develop a network of intermodal freight terminals (then) Prime Minister Kevin Rudd announced that: across Melbourne. “In 2010 the transport priority for the Council of Australian An example of why this study is so important is reinforced by Governments will be freight transport … the freight task will the fact the number of containers using the Port of Melbourne require a massive effort: companies will have to improve will increase from two million in 2007 to up to eight million by transport and logistics strategies and efficiencies, and 2035. governments will have to undertake substantial new investment and policy reform”. The paper proposes three principal rail-to-road intermodal terminals to the west, north and south-east of Melbourne, This announcement gave ALC an ideal platform to advocate a complemented by a number of road-to-road terminals sited to range of policy measures such as its recent submission to service freight activity. Infrastructure Australia on the National Freight Network Plan— titled A Seamless Economy-A Seamless Supply Chain. The discussion paper proposes a new intermodal approach to moving rapidly growing volumes of port-related freight around ALC believes that the function of the National Freight Network Melbourne and recognises that the successful delivery of an Plan should be to ensure the regulatory environment, intermodal system will require a partnership approach between infrastructure and investment are in place to meet Australia’s Government and the private sector. freight needs. An important element in improving the transport and logistics Many States already have, or are developing, plans for the chain efficiency is encouraging intermodal facilities away from freight chains within their borders. An excellent example of how destination points, such as Ports located near the CBD. For State Governments can be proactive is the Victorian this to occur, the transport and logistics industry requires Government’s Freight Futures series. The NSW and access to freight corridors. Too much residential or commercial Queensland Government are now in the process of developing congestion around logistics infrastructure causes inefficiency, freight plans to dovetail into the national process. and we all end up paying for that.

ALC believes a National Freight Plan should not be a process To progress a national approach, ALC is advocating to of ‘picking winners’ from a list of projects, chosen without cost- Government that a National Partnership agreement should be beneﬁt analysis, nor should freight volumes be directed signed by all governments to: towards speciﬁc transport modes, ie the road vs rail debate. CONTINUED ON PAGE 14

12 INFORMATION TECHNOLOGY

Australia and Germany join forces to tackle global transport and logistics challenges

With its breakthrough IT and communications research and robust commercialisation pipeline, NICTA is making important contributions to Australia’s economy and knowledge base.

ICTA is Australia’s national centre of April 2010, we hosted an inaugural smart the Fraunhofer Project Group, Australia’s research excellence in information transport infrastructure technology forum New South Wales Government is providing Nand communications technology, at our corporate head office in Sydney, funds – to support establishing industrial carrying out use-inspired basic research featuring speakers from the NSW Roads projects. addressing and solving real world problems. and Traffic Authority (RTA), CSIRO, DSTO, NICTA Senior Researcher Mark Staples We aim to generate wealth for Australia by Intelligent Transport Systems Australia and is leading the Fraunhofer Project Group. Dr undertaking research that advances the Australian Logistics Council. Staples has research expertise and business knowledge, is recognised for its excellence, In March, we entered an $11 million, experience working in software and generates breakthrough, user-focused five-year agreement with Germany’s engineering, software architecture and technologies. Fraunhofer Institute for Experimental business technology. He is the leader of NICTA works to bridge the gap Software Engineering (IESE) to establish the NICTA’s Software Infrastructure business between research and industry by Fraunhofer Project Group on Transport and area, and a Conjoint Senior Lecturer at the commercialising our research and Logistics at our Sydney laboratory. University of New South Wales with the collaborating with industry. The agreement creates an immediate School of Computer Science and Commercialisation of our research can take framework for joint research work to solve Engineering. the form of spin-out companies, licensing important transport and logistics problems. “The agreement is a formal basis for agreements, joint ventures, consultancies or The two organisations will bring together research collaboration and brings together contract research. NICTA’s four existing their complementary skills and world- an impressive suite of international spin-out companies employ around 80 leading expertise in these areas. engineering, science and business expertise staff. There are also several mature research “The Fraunhofer Project Group at to tackle real world problems. We will draw projects well on their way to becoming NICTA joins outstanding talent from our especially on capabilities in embedded spin-out companies. NICTA has 308 two organisations. The possibilities that this systems, software engineering and research staff, 118 professional and will create for NICTA and Australia are truly optimisation methods,” Dr Staples said. corporate staff and 244 university students exciting. Australia must be part of the The Fraunhofer Gesellschaft is the completing their PhDs across five NICTA global innovation system to build largest organisation for applied research in labs around Australia. competitive advantage in technology and Europe with a central role in the global ICT NICTA is undertaking exciting research the broader economy, and this is a major innovation system. Establishing a Project in the area of transport logistics and smart step in that direction,” NICTA Chief Group in Australia builds on their strong transport infrastructure and has a number Executive Officer Dr David Skellern said. international reach throughout Europe, the of important collaborations in this sector. In In addition to NICTA’s contribution to United States and Asia.

13 » Establish the concept of nationally significant 2010, the fact is a truck transporting goods from Melbourne to infrastructure; Brisbane is subject to three different laws relating to vehicle » Ensure that land use decisions prioritise the efficient regulation, safe load regulation, driver licensing and road taxes. operation of the nationally significant infrastructure; and This is an issue being addressed by the National Heavy Vehicle » Create a fund for state and local governments which Framework which will administer a body of national heavy incur expense as a result of making land-use decisions vehicle laws such as: that favour nationally significant infrastructure over other land uses, eg shopping centre vs an intermodal » a national heavy vehicle registration scheme, terminal. established under Commonwealth law; For most freight, speed between nodes (eg freight hubs) is not » a consistent approach to minimum standards for heavy as important as consistent flow. This is different to passenger vehicle driver competency and testing and to heavy transport where speed between nodes (eg stations) is a key vehicle driver training school recognition; and requirement. » a single physical national heavy vehicle driver license. The continued development of a single national system for heavy-vehicle regulation and maritime and rail safety should be encouraged and not frustrated.

It was a big concern for ALC that the COAG Reform Council ALC THEREFORE BELIEVES THE BILL reported in February that the National regulation of heavy SHOULD BE IMPLEMENTED IN vehicles was stalling and ALC will continue to monitor and IDENTICAL TERMS IN ALL AUSTRALIAN push reform in this very important area. JURISDICTIONS. Another issue being addressed under the national heavy vehicle regulatory framework is a national approach to Chain of Responsibility (CoR) laws, which, are intended to drive greater accountability along the freight T&L supply chain.

This difference in requirements highlights the need to have ALC supports a nationally consistent approach to CoR laws, as dedicated freight corridors (linking key nodes) that can run well as appropriate industry driven compliance measures as large volumes of freight at steady speed, timed to load/unload part of the framework for national heavy vehicle regulation. This at each node. will involve the adoption of legislation and/or regulations relating to CoR, based on the National Transport Commission model The ideal Logistics System smoothly delivers goods where they Road Transport Reform Bill. are needed, when they are needed, with the least amount of cost, energy, carbon, pollution, noise, congestion and harm. ALC agrees with the thrust of the legislation, which is intended This involves minimising wait time and handling during the to drive greater accountability along the freight T&L supply transport of goods to their final destination. chain and impose duties at all relevant points along the ‘chain of responsibility’. However there has been increasing Across the globe, the most efficient supply chains leverage divergence by Governments in applying CoR, which has real-time information and ensure real collaboration between compliance, enforcement and efficiency implications for the partners, whether this is within a closed-loop, across the Australian freight T&L industry. industry, or across the entire economy. Importantly, T&L companies hold a unique position in the supply chain because ALC therefore believes the Bill should be implemented in they are typically high users of existing and new information. identical terms in all Australian jurisdictions.

The use and control of Information and Communications ALC also supports and encourages industry driven compliance Technology (ICT) is therefore an issue of concern to the with CoR through the National Logistics Safety Code (NLSC) Australian freight T&L industry. and the Retail Logistics Supply Chain (RLSC) Code of Conduct. This lead to the launch in January 2010 this year of the ALC Discussion paper A Smarter Supply Chain—Using Information RLSC was initially developed for all parties in the retail supply and Communications Strategy to Increase Productivity in the chain to better manage their legal obligations in relation to both Australian Transport and Logistics Industry. Occupational Health & Safety (OH&S) and CoR. In April 2009, ALC developed NLSC to assist all companies in the supply Lack of a framework that clearly stipulates government (or chain to comply with their legal obligations. ACCC) requirements around cooperation and information sharing, creates regulatory uncertainty, and is a constraint for The Code not only deals with mass, dimension and load improved supply chain performance. restraint issues but also fatigue management.

A fully efﬁcient freight and logistics chain requires a stable and ALC recommends that a suitable mechanism should be clear set of regulations across all business activities however in included in any national CoR legislation which recognises that CONTINUED ON PAGE 16

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T&L industry participants adhering to the Code should be taken ALC has advocated that a body called Freight Australia to have complied with national CoR legislation. should be created within Infrastructure Australia.

Since the relevant T&L operator has the greatest knowledge of By identifying infrastructure of national signiﬁcance for the their business, the Code documentation must be authored by purposes of the National Freight Plan, this new body would act the operator to determine the processes, procedures and as a ‘champion’ for the logistics industry to Government. systems that identify and evaluate risks, and implement appropriate controls to comply with CoR. Additionally, by commissioning and analysing data to determine the type of regulatory environment and infrastructure needed to The development of performance-based regulation embracing meet the freight task in, say, 20 years, this new body could co-regulatory schemes designed to maximise compliance and effectively determine the way in which intermodal facilities away efﬁciency, will allow the Australian T&L industry to expand the from destination points can be developed. Australian freight effort without compromising the public interest. Identifying blockages affecting the transport and logistics chain and report progress in removing them, in much the same way Such an approach is consistent with established risk as the COAG Reform Council reports progress on the management processes which stipulate that businesses should seamless economy agenda would be another function of this manage all credible risks using the ‘as low as reasonably new body. practicable’ principle. There are a number of initiatives that could be undertaken now The extent of regulatory action at the national level impacting by the Government to ensure 2010 really is the year of freight. on the freight T&L industry reinforces the fact the Progressing these initiatives would ensure 2010 is truly Commonwealth should establish a national freight coordination remembered as The Year of Freight Transport. body with responsibility for implementing and monitoring the national freight plan.

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16 LOGISTIC SERVICES

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he family-operated business supplies a dedicated and which means customer requirements, ranging from transport and purpose-built fleet complete with operational support, to storage to lifting and quarantine, can all be serviced at the one T major manufacturers and distributors in the state’s south- location. east. Over the last three decades, Russell Transport has expanded This, coupled with a commitment to quality, compliance and its service offering to include heavy haulage, project management, safety, cements Russell Transport’s focus on delivering a custom- specialised and general transport, crane hire and warehousing. built solution to a client’s unique requirements. Russell Transport operates under a number of compliance Information: phone (07) 3131 0131; fax (07) 3131 0133; programs which include “Trucksafe” industry quality standard and [email protected], www.russelltpt.com.au. AS4801 OHS Management Systems. With shared ownership with Metro-Lift Cranes, the group is well positioned to provide a safe and reliable total logistics solution. In 2009, the company opened a new “Approved place for Quarantine” depot to service the Port of Brisbane precinct. The strategically-located facility at Lytton comprises a wash facility, fumigation pad, quarantine storage area and large hard stand. The group’s Heavy Haulage operations and Metro-Lift Cranes also operate at the Lytton site,

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17 LOGISTIC SERVICES

Port of Darwin. Investing in the future.

The Port of Darwin is a multi-modal and future focused port which is strategically positioned as Australia’s nearest port to Asia and the nation’s ‘northern gateway’ for Australasian trade.

he Darwin Port Corporation (DPC) is currently spending over Shanghai route complementing an expansion of the container and AU$150 million of investment capital to upgrade Port break bulk service to Singapore and south-east Asia. Tfacilities to meet the growing needs of exporters and Cattle exports remain strong with record shipments being importers. achieved in recent years. The Port took the world record for a Part of the infrastructure program involves the development of livestock shipment when 22,184 steers and heifers were loaded the East Arm Wharf Facilities Masterplan 2030, which will provide aboard a single vessel bound for Indonesia. long term staged management strategies. Darwin is regarded as Australia’s second offshore industry The Port of Darwin is also the northern terminus of the Adelaide to Darwin rail link and many mine operators have support hub and the Port of Darwin is the import and distribution nominated it as their port of choice to export millions of tonnes of destination for most cargoes used in the oil and gas industry in the ore including manganese, copper concentrate, iron ore and Arafura Sea, Timor Sea and waters off the coast of Western phosphate rock. Australia, including those in the Bayu-Undan field which supplies In just its third year of operation the $24 million bulk materials the LNG production facility at Wickham Point in Darwin Harbour. handling facility at East Arm Wharf saw trade increase by 75% on The Port’s offshore oil and gas rig tender berth facilities handle the previous year and this growth is expected to continue. in excess of 500 offshore exploration and operations vessel calls To support such increases in dry bulk trade the DPC has and 350,000 tonnes of cargo annually. Significant growth in the implemented major infrastructure upgrades including a 1,500 tph number of rig tender vessel calls and cargo carried will continue rail dump with the capacity to handle 25 ore trains per week and a with the forecast of more oil and gas activity in the region. bulk ship loading facility with a capacity of up to 2,000 tph. These facilities will be supplemented by a new conveyor system to move The Port of Darwin’s ability to service the growing needs of dry bulk cargoes from the stockpiles to the bulk loader. Australasian trade and the region’s oil and gas industry ensures its Container vessel calls have grown substantially in recent times position as a key player in the future economic development of the with the introduction of larger vessels on the Darwin – Taiwan – Northern Territory and Australia.

18 PORT of DARWIN Australia’s northern gateway

Located half way between Sydney and Singapore, the Port of Darwin is Australia’s nearest port to Asia, the terminus of the AustralAsian railway, and the region’s growing multi-modal transport hub.

Capable of handling a wide range of cargoes, the port provides 754 metres of continuous deepwater berths, dedicated container facilities and an extensive bulk liquids terminal. There is also a bulk material handling facility which includes a 2,000 tph shiploader and a 1,500 tph rail dump, both to be supplemented by a new conveyor system.

The Port of Darwin is a recognised supply base for the Timor Sea oil and gas industry and is to become the site of a second LNG plant. The Port also holds the world record for the largest single export shipment of live cattle.

With more than AU$150 million currently being spent on capital infrastructure programs and the development of Masterplan 2030, the Port of Darwin is gearing up to meet Australia’s future trade needs.

Phone: +61 8 8922 0660 Fax: +61 8 8922 0666 [email protected] GPO Box 390, DARWIN NT 0801 Australia www.darwinport.nt.gov.au NATIONAL TRANSPORT POLICY FRAMEWORK 2010

The following report is a summary of the Australian Logistics Council’s responses to the Proposed National Ports Strategy (Towards a Seamless Supply Chain) and to the National Freight Network Plan (A Seamless Economy—a Seamless Supply Chain. Full documents can be found at www.austlogistics.com.au.

A SEAMLESS ECONOMY, A SEAMLESS Local last kilometre issues SUPPLY CHAIN—NATIONAL FREIGHT The ALC refers to the Victorian Freight Futures document, NETWORK PLAN which notes that communities can be exposed to the last segments of heavy freight journeys. SUMMARY OF THE SUBMISSION TO INFRASTRUCTURE AUSTRALIA ON A NATIONAL In relation to capital-city strategic planning systems, COAG FREIGHT NETWORK PLAN agreed that, by 1 January 2012, all states will have in place plans that meet new national criteria, with the COAG Reform If the plan is to improve the national freight effort, the regulation Council independently reviewing the consistency of capital city must be right. strategic planning systems against the new criteria during 2010 Single national systems for heavy vehicle regulation and and 2011. maritime and rail safety are to be encouraged not frustrated. There should be greater clarity as to the rules surrounding land use. Recommendation 1 The function of the National Freight Plan (NFP) operating Recommendation 3 within the National Transport Policy Framework is to The NFP should encourage the development of ‘inland ensure the regulatory environment, infrastructure and ports’. investment are in place to meet Australia’s freight needs. Information Interconnectivity is an important aspect in the Crucial to this task is properly identiﬁed and supported transport and logistics industry, requiring encouragement. nationally signiﬁcant infrastructure.

Inland ports Setting a target for the NFP—the ‘freight network target’ Most major ports are generally located within densely ALC believes an NFP should not be a process of ‘picking populated urban areas. winners’ from a list of projects, chosen without cost‐benefit analysis, nor should freight volumes be directed towards Rapid expansion of commercial, residential and retail specific transport modes. development near major destination points can constrain further port development. Rather, the function of the NFP should be to ensure the estimated freight task anticipated at a given time in the future Noise from engine and brakes, air pollution and the visual (say 20 years) can be met. desolation of empty containers stacked close to residential areas add to the community discontent. Recommendation 2 Greenhouse gases from vehicles, particularly trucks, concern A national partnership between the states and territories the community. should: Business is also concerned about losses caused by » identify nationally significant infrastructure congestion and storage of containers held as a result of truck (through the Australian Transport Council); queues and missed time slots. » ensure land-use decisions give priority to nationally significant infrastructure; and Finally, the predicted increase in the freight task means the system of heavy vehicles coming from the suburbs to a central » provide a fund to finance land-use decision by port pick up point will not be sustainable. state and local governments that favour nationally significant infrastructure over other land uses. One solution is the development of intermodal freight terminals such as that mooted for Moorebank in NSW.

20 The Victorian Government publication Freight Futures: should be able to declare that the proposed sharing of Increased use of intermodal solutions, highlights the trend information is necessary to permit the efficient operation of the towards intermodal solutions to cut dwell times and avoid road logistics chain. congestion. A fully efficient freight and logistics chain requires a stable and The ALC recommends the NFP be designed to encourage the clear set of regulations. development of these intermodal facilities. Information and communications collaboration ALC also supports the development of an inland port that: Impartial industry-wide ICT solutions for collaborative » recognises the interconnection between the intermodal information-sharing enhances the transport and logistics facility, freight corridor and destination point; and industry’s ability to deliver predictable and reliable transactions. » ensures that infrastructure and regulatory decisions are made recognising that interconnectivity. As the ALC Smarter Supply Chain paper said: …information that exists today is not being leveraged as Recommendation 4 it might to increase the productivity of T&L companies, The National Freight Plan should encourage the their customers and the economy in general. development of mechanisms permitting the transfer of This failure to adapt ignores innovation and new non-proprietary information across the transport and technologies that can deliver significant benefits and logistics chain. customer service improvements, including the latest To the extent that information sharing that could be regarded generation of Logistics Management Systems, Vehicle as being anticompetitive, the Federal Minister for Infrastructure Tracking and Monitoring, Real-Time Traffic Information,

21 Routing, Freight Matching, and Wireless Two other issues need to be considered as part of an overall Communications that can ensure the effective freight plan. integration of all parts of the supply chain. Road Pricing The paper noted that the National Transport Commission made the following recommendation early in 2009: Thirdly, The Australian Transport Council is developing nationally government should create greater information transparency by consistent road pricing through Phase II of the COAG Road developing a common IT platform that: improves the transfer of Reform Plan. information along the chain; and creates an information system ALC notes the COAG Road Reform team is developing draft that enables holistic management of the intermodal chain. policy principles to assist it in developing road pricing rules.

The NFP should encourage passive access to non-proprietary ALC also notes that road pricing proposals could be contained information to improve the ﬂow of freight from one end of the in the Report on the Australian Future Taxation System (the chain to another. Henry Review).

This access could include the development of a ‘portal’ that As Ken Henry said in a 2009 speech: could ‘glue’ the information held on the systems of transport and logistics chain participants, thereby allowing the timely One of the best illustrations of this (using technology to exchange of information with all users and on an equal basis determine tax burdens) is in the area of road pricing, where the information is non-proprietary, or alternatively a set of where new technologies can allow for more efficient guidelines that spell out what is required by users in each of the charging for road use, leading to reductions in four major flows, combined with standard data definitions, so congestion and improvements in traffic flows…. those developing any enabling software take these into In a subsequent speech, he said: account. One of the questions the Panel has under consideration Recommendation 5 is whether further substantial gains, including from competition among providers, can be secured without The National Freight Plan should aim at a single Land quite specific reforms to our tax-transfer system… Transport Regulator responsible for regulation across all modes. Finally, designing an improved tax-transfer system for the federation is not enough… A new intergovernmental agreement (IGA) would be necessary… Nationally harmonised regulation If the plan is to improve the national freight effort, the regulation An IGA will also need to have some specific timelines to must be right. ensure that the reform agenda is delivered but may also need to have some flexibility in relation to timing, It is unacceptable, in a country that operates as a single especially if the reform package is an ambitious one… market, that a truck transporting goods from Melbourne to Brisbane is subject to three laws relating to vehicle regulation, Given the importance of road transport to the freight effort, the safe load regulation, driver licensing and road taxes. NFP should contain a view on pricing mechanisms that would promote efficiency and could be put to government as it COAG has agreed to: determines tax policy.

» a national rail safety regulator, based in South Australia; ALC is concerned that two different road-pricing models could emerge from two different government policy areas. ALC is » a national regulator for maritime safety (Australian concerned the work of the COAG Road Reform Project may Maritime Safety Authority) responsible for regulating not be reflected in a broad intergovernmental agreement commercial vessels; developed by the Department of Finance. » a single regulation entity to administer a body of national heavy vehicle laws; The NFP should have pricing mechanisms that would improve the efficiency of the T&L industry that can be advanced as » a national heavy vehicle registration scheme, government determines tax policy. established under Commonwealth law; » a consistent approach to minimum standards for heavy ALC supports more effective pricing mechanisms for road vehicle driver competency and testing and to heavy transport linked to cost impacts to improve distribution of T&L vehicle driver training school recognition; and resources, and believes new measures should provide an incentive for high productivity vehicles. » a single physical national heavy vehicle driver licence. These principles could be included in the NFP. But ALC believes that to get the benefits from the rationalisation of regulations, a single Land Transport Regulator Finally, the ALC National Logistics Safety Code is harmonising with seamless regulatory arrangements across all modes the safety practices of different industry sectors. This will lead should be created. to greater efficiencies.

22 Recommendation 6 j. ensuring that the interests of the transport and logistics industry are recognised as government policy is developed. The plan should state that prices for road transport should be linked to costs. New measures should give an incentive for high productivity vehicles. Freemantle Ports—Planning of strategic freight routes

Recommendation 7 Port of Fremantle and its importance to the Western The Chain of Responsibility (CoR) laws should recognise Australian Economy the ALC National Logistics Safety Code which is The Western Australian economy is dependant upon trade for harmonising the safety practices of different industry its growth and viability. As the State’s only dedicated container sectors. A logistics participant who follows the NLSC port, the Port of Fremantle plays a crucial role in the state Code should be taken to have satisﬁed national CoR economy. It accounts for 76 per cent by value of the state’s legislation. seaborne imports and 16 per cent by value of the state’s seaborne exports. Finally, a dedicated element within the bureaucracy should monitor the NFP. Why are road and rail freight routes important to the Port of Fremantle? Recommendation 8 For a port to operate efﬁciently it is vital that there be good A body called Freight Australia should be created within road and rail land transport links that connect it with Infrastructure Australia to monitor the National Freight Plan. metropolitan and regional centres. The 24-hour seven day a week operation of the port and its transport linkages is critical to meet the needs of the global shipping industry and to remain Freight Australia competitive. The NFP is now being rolled out. However, ALC thinks the plan must be championed within government. If poorly planned these transport linkages may become restricted or congested and could result in an inability to meet A body called Freight Australia should be created within customers’ needs, loss of trade, reduced employment Infrastructure Australia. opportunities and greater transport costs.

The functions and responsibilities of Freight Australia could The transport problem! include: In the Perth metropolitan region many of the strategic freight a. commissioning and analysing data to determine the type of routes that service the port are under threat from urban regulatory environment and infrastructure needed to meet encroachment. With growing land development pressures, the freight task in, say, 20 years. sensitive land uses (mainly residential) are constantly seeking to b. identifying infrastructure of national significance for the locate closer and closer to strategic freight routes, which purposes of the NFP; results in incompatibility of activities. c. determining the way in which intermodal facilities away from The impact of urban encroachment upon strategic destination points can be developed; freight routes d. developing the inland ports concept; Developers often seek to maximise their return by locating e. identifying blockages affecting the transport and logistics residential developments as close as possible to the freight chain and report progress in removing them. The route. identification of blockages can ‘shame’ relevant entities into action. The ALC document Infrastructure Programs for New residents are subsequently faced with poor amenity and Addressing Supply Chain Blockages identified 23 supply lobby state and local governments to have heavy freight traffic chain blockages affecting supply chain efficiency.This could restricted or prohibited. Such problems and conflicts can be be used as a template. avoided through good planning and building design. The impacts of urban encroachment on freight routes can include: f. advising Infrastructure Australia as to whether a particular piece of infrastructure should receive funding; » Inability to use the strategic freight route for its current g. acting as the government entity responsible for and future planned capacity; encouraging the transfer of non-proprietary information » Operational impacts on the land uses that are across the transport and logistics chain; and dependent upon the strategic freight route; h. acting as a ‘champion’ for the logistics industry within » Social, environmental and economic impacts as a result government. This would include: of not being able to use the freight routes as planned; i. ensuring information requirements of agencies such as and Customs, AQIS and security agencies are practical and not » Reduced amenity for the sensitive uses, namely too burdensome; residential, that have encroached on the freight route.

23 What can be done from a planning perspective? » Quantitative Risk Assessment which took into account individual and societal risk levels as input to buffer Good planning around strategic freight routes is essential to deﬁnition; provide certainty for the future with good outcomes for all stakeholders. When planning for development around freight » Several noise modelling exercises to quantify off-site routes there are several key planning documents that seek to emissions against the WA Noise Regulations; ensure good planning outcomes. These planning tools include: » Obtrusive light investigations; and » Odour modelling to quantify offsite emissions. » State Planning Strategy (WAPC)—This supports road, rail and port facilities with policies to ensure transport At both the state and local level, the planning basis for inclusion corridors and are protected from incompatible land of a buffer around the Port of Fremantle is supportive. uses. » Statement of Planning Policy No 1. State Planning Based on the demographic considerations, the scientiﬁc Framework Policy (WAPC)—This provides clear analyses carried out during the study and the existing and direction as to how transport and associated future planning context, a three level Buffer has been infrastructure should be planned. recommended.

» Statement of Planning Policy. Road and Rail Transport The three recommended levels are: Noise and Freight Considerations in Land Use Planning (WAPC)—This policy seeks to minimise the adverse » Area 1 which should exclude the establishment of impact of transport noise. additional sensitive uses other than residential uses and » Local Planning Strategies—Strategic freight routes can with residential uses having a high level of protective be identified on the LPS map and discussed within the conditions relating to maintaining public safety and strategy report, so that the need to protect strategic ameliorating the impacts of odour and noise; freight routes is more widely known and understood. » Area 2 which allows the establishment of sensitive land uses and with these land uses having a medium level of Buffer Definition Study Summary protective conditions; and In light of the strategic importance of the Port of Fremantle to » Area 3 which allows the establishment of sensitive land Western Australia it is essential that the impacts of port uses and with protective conditions implemented at the operations on the surrounding community and vice versa are discretion of council. determined and understood so that: Buffer Current status » Inner Harbour operations are not unduly restricted; The State Industrial Buffer Policy was adopted by the WAPC in » Inner Harbour operations are not subject to additional 1997. controls that reduce port efficiency and/or competitiveness; Endorsement of Fremantle Ports Buffer was given by the » Inner Harbour growth is permitted to continue to its WAPC and the DEP in 2004. optimal sustainable capacity limit; The City of Fremantle and Town of East Fremantle are currently » the safety and amenity of surrounding land uses is in the process of incorporating the Buffer areas into their maintained; and respective Town Planning Schemes. Both local authorities have » the interests of existing landowners surrounding the prepared Buffer Policies in conjunction with Fremantle Ports Inner Harbour area are recognised and appropriately and these are expected to be implemented shortly. addressed. FOOTNOTES As a consequence, Fremantle Ports undertook to apply the Western Australian State Industrial Buffer Policy to determine 1 Infrastructure Australia and the National Transport Commission The Proposed National Ports Strategy May 2010 page 33. the need for an off-site buffer area surrounding the Fremantle 2 See in particular Part E3 of Volume 2 of the Henry Review. Inner Harbour. Halpern Glick Maunsell, as lead consultant, was 3 Observation made by Paul Garaty, divisional general manager of Patrick commissioned by Fremantle Ports to undertake the Buffer quoted in Transport and Logistics News 18 May 2010— Definition Study. http://www.tandlnews.com.au/2010/05/18/article/Port-Botany-the-stevedor es-respond/SPQSGFJXGX. The Study drew on the results of a number of investigations. These were:

» Port Operational Sub-study to determine the frequency, location and duration of residence within the harbour of livestock and scrap ships as input to noise and odour modelling;

24 NATIONAL PORTS STRATEGY – ALC POSITION

Australia’s freight task will triple by 2050—from 503 billion policy-making in areas relevant to freight are supported, as tonne kilometres to 1,540 billion tonne kilometres, with local are the priorities specified for the proposed strategy: demand for total freight movements increasing by as much as » planning for relevant ports and infrastructure; 60 per cent by 2020. » protection of the ability to execute plans; The Australian Government is developing not only the National » improving landside efficiency and reliability; and Freight Plan (NFP), but a National Port Strategy as part of an » clarity, transparency and responibilities in ports overall National Transport Policy Framework. The time has come to commence action to ensure the The vision of the proposed strategy Australian freight effort is not frustrated by either undercapitalisation in essential infrastructure, poor regulatory To drive the development of efficient sustainable ports and design or short-sighted planning decisions. related freight logistics that together balance the need of a growing Australian community and economy with the quality of Planning life aspirations of the Australian people and its objective:

» to improve the efficiency of port related freight movements Nationally significant infrastructure across infrastructure networks, minimise externalities National plans and associated policy documents should be associated with such freight movements and influence focussed on ‘significant’ infrastructure.

25 The NFP requires similar focus. Relevance of being designated as nationally significant: ‘Significant’ infrastructure is either: It would have two purposes: a. of national significance; or The first would assist Infrastructure Australia as it develops b. if developed, would be of national significance having infrastructure priority lists and provides governments with regard to: advice on planning for, and investing in, infrastructure. c. the size of the facility; The second is that it would assist governments when making d. the importance of facility to trade and commerce; and land use decisions that can impact on an efficient freight effort. e. the importance of the facility to the national economy Clause 3 of the National Objective and Criteria for Future This should be used as the criteria for judging whether a port Strategic Planning of Capital Cities requires a capital‐city should be covered by the nationally oriented planning strategic planning system to provide for transport corridors, documentation. international gateways, intermodal connections and the reservation of land to support expansion. ALC also agrees that strong state and regional plans that work in conjunction with a national strategy developed using best The ALC report recommends a national partnership between evidence provided by organisations such as the Bureau of the states and territories outlining ‘nationally significant Infrastructure, Transport and Regional Economics and the infrastructure’, ensuring land-use prioritises this, and creating a Australian Bureau of Agriculture and Resource Economics fund for government expenses. should be prepared. ALC generally supports the recommended actions contained in the proposed national ports strategy. It is envisaged that the hierarchy of the various documents would operate in a manner similar to table 1 below. The transport and logistics industry requires access to freight corridors. Moreover, too much residential intrusion near, or ALC commends the work performed by the Victorian congestion around, logistics infrastructure causes inefficiency. Government in preparing documents such as Freight Futures and Shaping Melbourne’s Freight Future Proposals for an ALC agrees with observations made in the draft National Ports Intermodal Solution to Service Melbourne’s Growing Strategy that freight is regarded as the ‘poor cousin’ of the Containerised Freight Task. urban planning context.

26 The National Transport Policy Framework should aim to correct The draft strategy identifies the transport corridors that should this perception. be treated ‘as if they were part of the relevant’ port—a recognition of the need to recognise that some intermodal Governance of ports facilities located away from destination points act as an ‘inland port’. ALC believes that the strategy inherent in policies such as the Competition and Infrastructure Reform Agreement should For example: continue, with facilities as far as possible operated as vertically separated ‘common user’ infrastructure. » all feeding road and rail lines connecting the five major container ports of Fisherman Island, Port Botany, Port At the very least, Government Business Enterprises such as of Melbourne, Adelaide and Fremantle (as well as the Port Authorities should act as commercial organisations. port area themselves) as well as the terminals/DCs in industrial areas supporting import/export supply chain; This would accord with the Australian Transport Council’s and desire to introduce market principles into transport. » the feeding road and rail lines Major regional multi-user and multi-commodity ports, such as Pt Kembla, Efficient operation of the landside access to ports Newcastle, Geelong, Westernport, Gladstone, Mackay The draft strategy document strongly favours the use of real and Townsville (as well as the port areas themselves). time information systems to increase the efficiency of movements. A National Regulator ALC recommends a single Land Transport Regulator with seamless regulatory arrangements across all modes.

ALC NOTES THAT ROAD PRICING, This policy objective is reinforced by suggestions such as this INCLUDING CONGESTION CHARGING2, in the draft strategy document: IS AN IMPORTANT CONSIDERATION GIVEN THAT CONGESTION OUTSIDE OF “Current governance for roads differs markedly from that for other infrastructure in supply chains, including the THE PORT PRECINCT CAN ports. In priority area 3 it was suggested that the CONTRIBUTE TO DRIVERS BEING LATE Council of Australian Road Reform agenda be TO THEIR TIME SLOT. advanced by use of some identiﬁed port Freight Corridors as a test bed. If so, then freight priority principles should be applied at the same time/trial.”

As the ALC has indicated in its publication A Smarter Supply Observations such as this illustrate the national importance of Chain Using Information and Communications Strategy to transport corridors. Increase Productivity in the Australian Transport and Logistics Industry, impartial industry-wide ICT solutions for collaborative The draft strategy said that national coordination might best be information-sharing enhances the transport and logistics effected by an expert advisor in each city, rather than a industry’s ability to deliver predictable and reliable transactions. centralised approach, because detailed local understanding of operating conditions and parameters is necessary. It is notable ALC is therefore pleased with the observation contained in the that most states do have well-developed freight and logistics draft strategy document that: councils, which complement and support the ALC, and also could be of considerable assistance in the development of “The draft strategy recommends further investigation of freight policies and freight plans. the ports information community proposal along parameters such as interoperability among relevant ALC does not support this position as it would detract from ports. The National Transport Commission, reporting to national efﬁciencies in the freight effort. A single advisor the Australian Transport Council would be in a relevantly providing advice to relevant entities would necessarily inﬂuence good position to do this.” changes to port practices designed to enhance productivity.

ALC agrees that the ATC should take the lead in ensuring the ALC believes state-based organisations are not appropriate establishment of a regulatory environment facilitating the use of bodies to provide advice on matters relating to the efﬁcient information along the freight chain. operation of national infrastructure.

Part 7 of the proposed national ports strategy discusses issues such as truck utilisation and congestion.

ALC notes that road pricing, including congestion charging, is an important consideration given that congestion outside of the port precinct can contribute to drivers being late to their time slot3.

27 NATIONAL PORTS STRATEGY

Revolutionising Sydney’s port supply chain

Sydney Ports Corporation is leading Australian port management through a number of major infrastructure developments and regular engagement with industry stakeholders, to improve port performance and facilitate future trade growth.

s Sydney continues to grow, so does the demand for The Port Botany Landside Improvement Strategy complements imports and exports and their associated delivery. One of the Port Botany Expansion and Intermodal Logistics Centre at Athe future challenges for Sydney’s ports is to accommodate Enfield projects by improving landside transport infrastructure. this growth in trade. The $1 billion, 60 hectare Port Botany Expansion project Sydney Ports is proactively working with industry to implement involves constructing a third container terminal at Port Botany and various initiatives and infrastructure projects to improve the port’s is one of the largest port infrastructure projects undertaken in performance and facilitate this forecasted trade growth. These Australia in the last 30 years. The expansion will cater for future initiatives and projects include the Port Botany Landside trade growth and introduce further competition and efficiencies at Improvement Strategy; the Port Botany Expansion project; the the stevedoring level. Intermodal Logistics Centre at Enfield and the Bulk Liquids Berth 2. Sydney Ports is also working with the New South Wales The New South Wales Government is pioneering a world first Government to move more goods by rail – with a target of moving to increase the port’s efficiency, transparency and productivity, by 40% of containers by rail – and manage the growth in freight regulating stevedore and carrier performance at its leading trucks on our roads. Intermodal and distribution centres are crucial container port in Port Botany, Sydney. to achieving this goal. The Intermodal Logistics Centre at Enfield The proposed framework for the reforms establishes a clear will enhance the network of intermodal terminals throughout commercial relationship between carriers and stevedores whereby metropolitan Sydney to support this increase in rail movements penalties would be paid by either party for failing to achieve between the terminals and Port Botany. agreed performance benchmarks. For more information visit www.sydneyports.com.au Sydney Ports is currently providing daily port performance Sydney Ports Corporation manages the commercial ports of reports and communicating real-time port traffic conditions via live Sydney. Combined, Sydney’s ports handle more than $50 billion camera feeds, which can be viewed on the Sydney Ports website. worth of trade each year. Sydney Ports’ role is to manage the ports These landmark reforms will ease daily truck congestion and navigational shipping, security and safety needs; facilitate existing freight delays, making the entire land supply chain high performing and future trade needs; minimise risks to the environment and and safe. have regard for community interests.

28 REVOLUTIONISING OUR PORT’S SUPPLY CHAIN

Sydney Ports Corporation is a manager and developer of world-class, efﬁcient, sustainable ports and logistics networks.

Right now, we are working on improving Port Botany’s supply chain with the most ambitious ports reform agenda ever put forward in New South Wales, Australia – the Port Botany Landside Improvement Strategy (PBLIS). Our commitment is to: Maximise the efﬁcient movement of trade passing through the port Provide greater transparency of the overall supply chain performance Improve industry communications and provide regular information updates.

With international container trade continuing to grow, Sydney Ports is leading the PBLIS reforms to provide a more competitive port supply chain. Supporting the reforms are other major infrastructure projects, including: The construction of a third container terminal at Port Botany that will double the current handling capacity of the port The enhancement of Sydney’s intermodal terminal network through the construction of the Intermodal Logistics Centre at Enﬁeld that will support the increased movement of container trade by rail through Port Botany.

“We are working on improving the port’s supply chain”

www.sydneyports.com.au NATIONAL FREIGHT NETWORK PLAN SHOULD FOCUS ON ‘NATIONALLY SIGNIFICANT’ INFRASTRUCTURE

The CEO of the Australian Logistics Council, Michael Kilgariff has endorsed the call by Infrastructure Australia Chairman Rod Eddington for a national approach to the planning and management of ports and freight movement. As the peak national body for Australia’s freight T&L industry, the Australian Logistics Council (ALC) has been highly engaged with Infrastructure Australia and has welcomed the release of Infrastructure Australia’s updated National Priority List—Getting the fundamentals right for Australia’s infrastructure priorities.

ALC was very pleased that ‘Transforming Our Cities’, ‘Competitive International Gateways’ and ‘A National Freight Network’ were identiﬁed as three of the seven themes to meet the infrastructure challenge.

ALC agrees with Infrastructure Australia’s audit that “rail and road freight infrastructure planning and investment should no longer be undertaken in isolation from each other. Australia needs a coordinated and integrated freight network that is better linked with economic and land use planning, otherwise the potential investment beneﬁts will not be fully realised.”

ALC has made submissions on both the National Ports Strategy and a National Freight Network Plan. Accordingly, ALC believes that the National Port Strategy and the National Freight Network Plan should be focused on infrastructure that is ‘nationally signiﬁcant’. Nationally signiﬁcant infrastructure should be judged on the importance of the infrastructure to the national economy and includes inland ports/intermodal terminals and the national ports.

Infrastructure Australia has already picked up some of the proposals made by ALC, including:

» The requirement that port plans should have a 20 year horizon; » The importance of ensuring planning instruments preserve freight corridors and that buffer strategies are in place; ACCORDING TO MR KILGARIFF, ALC » Further investigation of ‘port information community ALSO BELIEVES THAT A SINGLE systems’ (information interchanges) amongst freight NATIONAL REGULATOR SHOULD BE chain participants; and RESPONSIBLE FOR FREIGHT » The need to identify transport corridors that should be MOVEMENTS IN AUSTRALIA THROUGH treated as if they were part of the relevant port—an THE ADMINISTRATION OF A UNIFORM identiﬁcation of the need to recognise that some intermodal facilities located away from destination SUITE OF LAWS SEAMLESSLY points act as an ‘inland port’. REGULATING ALL MODES OF FREIGHT Infrastructure Australia is developing a strategy for a national TRANSPORT.

30 freight network and ALC hopes that other elements of its » There needs to be a focus on the need to improve submissions are also ultimately incorporated into the Plan, freight productivity, subject to sustainability and including the development of a National Partnership between community amenity being improved, and as such the the Commonwealth and the states/territories which strategy will need to involve all three levels of acknowledges that land use decisions should prioritise the government as well as industry; efﬁcient operation of nationally signiﬁcant infrastructure. » More consistency will be required in governance in terms of ownership, community service obligations, A range of policy issues relating to the management of this regulation, and planning; network is also under consideration.

This includes a more consistent approach to freight network » There needs to be a long term pipeline of projects to studies, forecasts and gap analysis; rail governance, rail/road improve and extend the seamless networks; modal integration; freight priority; and less reliance on » Significant practical issues for the road freight network government funding. Whilst the work is in its early stages, it would include use by high productivity vehicles, freight seems likely that: priorities, and pricing/ charging; » It should address the capacity of the nation’s freight » There should be a robust and consistent assessment system to operate as an inter-connected network framework for proposed projects involving road and rail serving the freight nodes of the major settlements terminals; supplying the movement of more than one class of » Consideration needs to be given to gaining access to goods; the networks from elsewhere; and » Some significant transport infrastructure, and » Jurisdictions will be asked to develop and publish infrastructure that may merit a contribution from public formal freight plans, identify and reserve terminals and funding, may not necessarily need to be part of a road and rail corridors, provide priority access to freight national freight network; vehicles on certain corridors and to ensure access for » The network will need to cover the major container and high productivity vehicles on the national network. industrial ports as these are Australia’s principal nodes ALC also believes that a single national regulator should be for general freight traffic; responsible for freight movements in Australia through the

31 administration of a uniform suite of laws seamlessly regulating ALC recommends that strong state and regional plans that all modes of freight transport. work in conjunction with a national strategy should be developed. ALC commends the work performed by the ALC will continue to support appropriate nationally consistent Victorian Government in preparing documents such as Freight regulatory frameworks and transparent markets to ensure Futures and Shaping Melbourne’s Freight Future Proposals for Australia enjoys the full benefits of national freight T&L policy an Intermodal Solution to Service Melbourne’s Growing development and reform. Containerised Freight Task. ALC recommends the development of a National Partnership Agreement between the states and territories to ensure that land use decisions prioritise the efficient operation of nationally ALC RECOMMENDS THAT STRONG significant Transport & Logistics (T&L) infrastructure. STATE AND REGIONAL PLANS THAT Infrastructure Australia strongly supports the development of WORK IN CONJUNCTION WITH A new intermodal capacity in our cities, and reservation of NATIONAL STRATEGY SHOULD BE options in growth areas and believes that a national freight DEVELOPED. ALC COMMENDS THE network also needs to be viewed in an historical context, to recognise and build on the long-term reforms that have moved WORK PERFORMED BY THE VICTORIAN Australia towards the aim of a single national economy. GOVERNMENT IN PREPARING DOCUMENTS SUCH AS FREIGHT Concepts for the future could include: FUTURES AND SHAPING MELBOURNE’S » Standardisation of more track on general freight FREIGHT FUTURE PROPOSALS FOR AN railways (notably within Brisbane and further to the INTERMODAL north), to Hastings in Victoria, and towards Bunbury in Western Australia; » Separate management of task-specific railways (for example the Hunter coal chain); The transport and logistics industry requires access to freight corridors. However, too much residential or other non-T&L » Unified governance of Australia’s general freight railway related commercial intrusion near logistics infrastructure causes under the Australian Rail Track Corporation, particularly inefficiency. In particular, land-use decisions need to be made the line west of Kalgoorlie and the line to the north of that satisfy “last kilometre” issues. Sydney; » Development of freight corridors and precincts in cities, In relation to capital-city strategic planning systems, the e.g. Moorebank in Sydney; Council of Australian Governments (COAG) agreed that, by 1 » Creation of a commercially orientated high productivity January 2012, all states will have in place plans that meet new road network within cities and to container ports; national criteria, which includes transport & logistics requirements. » Separation of urban passenger rail from the freight rail network in major capital cities; and ALC encourages all governments to take these factors into » Further development of longer train lengths on the account when deliberating on long term planning strategies. national rail network and, over time, double stacking by containers on the inter-capital city freight rail network.

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32 INFORMATION TECHNOLOGY

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onstruction began in September 2006 to 2012 following the completion of Airport Link. The Clem Jones Tunnel build the 6.8km tollway consisting of This is also how it got the name CLEM7! (CLEM7) is the first Ctwin two lane tunnels connecting the The CLEM7 allows motorists to bypass the north and south sides of Brisbane. Over 12,000 traffic of the CBD as they pass 60 metres under major road tunnel for people have worked on the project with the the Brisbane River, avoiding up to 24 sets of Brisbane and an road officially opening to traffic on 15 March traffic lights. 2010, over 6 months ahead of schedule. Businesses delivering goods, tradespeople, engineering feat. RiverCity Motorway operates the CLEM7 taxi drivers and everyday commuters all benefit with FLOW Tolling being the tolling partner for from lower costs, lower stress and being able both the tunnel and the Go Between Bridge. to anticipate how long the trip will take. Named after a former Lord Mayor, the With connections at Woolloongabba, Clem Jones Tunnel is the first section of the Kangaroo Point and Bowen Hills the CLEM7 new M7 Motorway due to be completed in makes travel faster, safer and more reliable.

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33 INFORMATION TECHNOLOGY

IT an enabler for better carrier integration

Air Cargo is a US$50 billion business that transports 35% of the value of goods traded internationally. Goods travelling by air are traditionally high value, precious and time sensitive.

antas Freight flies to over 140 standard but integrated, system to system but it is carriers, forwarders and shippers international destinations in 42 status messaging has not always been that must work more closely to understand Q countries carrying over 340,000 possible.” what is needed at a micro level. tonnes of freight per annum. Industry commentators were spruiking Triantafillides sights the work that Despite the critical role that carriers the benefits of greater integration 10 years Qantas Freight has been doing through its such as Qantas Freight play in the logistics ago - so what happened? Freight Futures business transformation supply chain, most have traditionally The airfreight supply chain is overly program as an example of the insightful focused only on the airport to airport complex with disparate technology and forward thinking required. movement of consignments. Less emphasis quality standards among the many different “Qantas is at the forefront of leading was placed on understanding the true end parties involved. the industry change and with this to end nature of the supply chain and on Triantafillides believes that in order to transformation project will be able to offer more closely understanding the enable the paradigm shift required a not just a suite of new value-add products requirements of the ultimate shippers and change in culture is necessary. but will deliver a new benchmark for what consignees. In the end-customer’s eyes, “In many cases, freight forwarders have is considered a ‘normal’ product offering shipments would temporarily disappear been heavily investing in systems for carriers,” he said. from view until they were delivered to the development so there is a growing “Instead of providing constant band-aid forwarder at destination. expectation that airlines keep up and solutions to adapt its legacy systems, Qantas Freight Head of Commercial Mr provide greater transparency and data Qantas is instead investing in an integrated, Theo Triantafillides believes the industry as integration.” he says. multi-million dollar system and working a whole is now working to realise the “Customs authorities and other benefits of better integrating carriers into regulators have been demanding increased with our industry partners to adapt its the supply chain and that IT is both a key compliance with their data requirements processes to better service their needs. enabler in achieving this shift in attitude and driving change for the better but in a “With our Freight Futures program we and a reason for change. lot of cases it is being left up to carriers to will be able to provide customers with “Aside from price and reliability there see the writing on the wall and invest in greater transparency and live time data are only two things of critical importance to infrastructure to provide not only what is through improved system integration and most customers – getting their shipment possible today or even tomorrow but proactive electronic messaging,” he said. from A to B and letting them know where further down the track.” In Australia at least it appears that the it is at any time in the process,” says At a macro level, industry bodies such national carrier is well and truly keeping up Triantafillides. as IATA are driving the adoption of broad with the needs of its customers, partners “Track and trace capabilities are industry standards and quality measures and regulatory authorities.

INFORMATION TECHNOLOGY

GS1 Australia working to assist the transport and logistics sector

The Australian transport and logistics industry plays a critical part in every business. It underpins every transaction of goods taking place in Australia every day, playing an important strategic role in the supply chains of all industry sectors.

t is the key link between trading GS1 standards provide a framework interoperability across the industry. partners nationwide and excellent that allows products and related Concrete benefits can include improved Icommunication and coordination is information about them to move efficiently efficiency, increased visibility of the flow of absolutely necessary as components and and securely for the benefit of businesses goods and shipments, more efficient goods are moved throughout the country. and the improvement of people’s lives, handling and inventory management, GS1 Australia is working closely with everyday, everywhere. Our standards ensure increased security of distribution, faster many of the key associations, transport effective exchanges between companies, providers and Government to assist this and act as basic guidelines that facilitate operations, and smoother exchanges with sector to understand, learn, leverage and interoperability and provide structure to Customs, AQIS and other government implement open global supply chain many industries. agencies. With GS1’s voluntary, user- standards to develop best-practice supply The use of open global standards is designed standards, companies in the chains. technology agnostic—they can be transportation and logistics sector can work To this end, it is in the national interest leveraged by any technology platform more efficiently, more economically, more for this important sector to collaborate on already in use. This allows GS1 Australia to sustainably and more competitively. the adoption of open global standards as a assist businesses to meet their specific Australia is well serviced by a world- basis for the exchange for non-competitive requirements, with an engagement that is leading GS1 Member Organisation which is information across the supply chain. The business-focused rather than technology- multiple duplication of much of this focused. While we understand that each well placed to support the domestic T&L information that currently exists is adding business’s supply chain issues are unique, industry to understand, learn, leverage and unnecessary cost to Australia’s supply solutions that leverage global standards will implement open global supply chain chains. reduce cost, complexity and support standards.

36 Streamlining your supply chain efficiencies

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www.gs1au.org 1300 366 033 SHAPING MELBOURNE’S FREIGHT FUTURE TOWARDS AN INTERMODAL FREIGHT FUTURE FOR MELBOURNE

Freight Futures is the Victorian Government’s long-term strategy to shape an efﬁcient and sustainable freight network for Victoria that supports the prosperity and livability of the State. Freight Futures provides the blueprint for a secure and properly planned freight infrastructure network to support the Government’s vision for Victoria, which includes a growing economy and productivity, population growth, regional growth and building sustainable communities.

The ALC Submission on a National Ports Strategy The paper proposed three principal rail-to-road intermodal recommended that Freight Futures should be taken as the terminals to the west, north and south-east of Melbourne, benchmark quality standard for national planning complemented by a number of road-to-road terminals sited to documentation. service freight activity. The Discussion Paper deﬁnes the Intermodal solution as the combined use of rail and road The Victorian strategy responds to the many factors that are modes for the transport of containerised freight, with rail driving changes in patterns of supply and demand. It provides generally carrying out the longer distance ‘line-haul’ leg of the industry with long term security through a clear statement of journey and road undertaking the shorter ‘pick up and delivery’ what the principal freight network is now and in the future, and leg at each end. a more predictable policy and regulatory environment.

Without substantial intervention, the economic cost of road congestion to all users, currently estimated at between $1.3 billion and $2.6 billion per annum, is projected to double by 2020. The Freight Futures strategy responds to the many factors that are driving changes in patterns of supply and THE NUMBER OF TONNES OF FREIGHT demand. MOVING AROUND MELBOURNE BY In addition to these trends, the Victorian freight task is ROAD WILL ALMOST DOUBLE BY 2030 expected to grow signiﬁcantly due to strong population growth FROM TODAY’S LEVELS. and increasing consumption. Freight volume across all transport modes is expected to grow by close to 50 per cent by 2020 and by around 100 per cent by 2030 from today’s levels.

The number of tonnes of freight moving around Melbourne by According to Roads and Ports Minister Tim Pallas, Shaping road will almost double by 2030 from today’s levels. In Melbourne’s Freight Future Discussion Paper puts forward an particular, the growth in total container trade through the Port innovative approach to moving growing volumes of port-related of Melbourne will increase the need to better integrate the port freight around Melbourne. with its hinterland and to manage the difﬁculties involved in As Melbourne’s population and economy continue to grow, we sustaining ports in built-up and increasingly residential inner need to meet our freight challenges and deliver a more efﬁcient urban settings. and sustainable Victorian freight network—with rail playing an In April 2010, the Victorian Government released the Shaping increasing role. Melbourne’s Freight Future Discussion Paper, which proposes According to the Freight Futures report, the current freight task to develop a network of intermodal freight terminals across of over 200 million tonnes or 12 billion tonne kilometres is Melbourne.

38 carried almost exclusively by road and is growing at roughly 3 » Freight would be carried to and from the terminals, per cent per annum, projected to double by 2030. mostly in off-peak hours, using a combination of rail and road modes, using specialised rolling stock and next Mr Pallas said the number of containers using the Port of generation high productivity freight vehicles to minimise Melbourne will increase from two million in 2007 to up to eight noise and environmental impact. million by 2035. Freight Futures recognises the long term need to drive “Around 80 per cent of these containers will have origins or increases in productivity in the face of such change to improve destinations in the Melbourne metropolitan area and today all Victoria’s economic prosperity and ensure that Victoria is well are carried by trucks. If we continue to rely solely on the current placed to face any challenges that may arise. road-direct pattern of freight movement, truck trips to and from Changes in the freight and logistics environment are expected the central Port area will continue to increase,” he said. to continue at an even greater pace into the future. Freight Key design propositions put forward in Shaping Melbourne’s Futures attempts to anticipate the key drivers of change. Freight Future include: World freight trade is increasing with economic growth, the » That terminals should offer port to door service, globalisation of supply chains, the use of larger vessels and the comparable with current road options; implementation of more efﬁcient freight and logistics systems. » Terminals should operate as inland ports with customs Improved productivity in road and rail modes will be needed to and quarantine status and be located within precincts support this greatly expanded port task. that encourage freight customers to locate nearby; » Operations should be based on government ownership of terminal land, oversighted by a single government- owned authority. Operation of the intermodal system would be contracted to the private sector;

39 From imagination to impact

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People Research Linkages Education Commercialisation THE NEW AUSTRALIA. YOU’RE STANDING IN IT

By Philip Halton, CEO, Australian Livestock Transporters Association

According to most opinion polls, if you live on the east coast of Even when they spend money, it will be a national priority list Australia, you probably think State Governments are pretty that guides them. much a waste of time and should be abolished. If you live on the west coast, you’re probably hoping you can break away What does this mean for us? It means that to protect and serve and be shot of the whole mess over east. our members in this new world, industry associations need to get much smarter over the coming years. We’ll need to be able But Australia isn’t going to do any of those things. Instead, this to present convincing, credible evidence for our points of country is going through a ﬁfty-year reform process, which view—and we’ve got to lift our game on that front. really kicked off in the seventies, to change the roles of the states. Australia isn’t going to abolish the states; we’re just going to BUT ONE OF THE CONSEQUENCES IS have more and more ‘national’ government arrangements that THAT IT WILL BE HARDER FOR make the legal boundaries between the states, and between INDUSTRY TO GET THE RESULTS IT the states and the commonwealth, increasingly irrelevant. WANTS JUST BY ROLLING THROUGH None of it involves messy, high proﬁle Constitutional Referenda. THE DOOR OF A FRIENDLY MINISTER. Instead, it’s all happening through funding deals. Government THAT’S A BIG CHANGE, ESPECIALLY in Australia is gradually being transformed by a series of joint OVER IN THE WEST. ventures, between the states and the commonwealth.

What you saw Rudd talking up on TV, all that business about creating ‘shared hospital funding pools,’ back in April was just We’ll need to be able to persuade several different ministers, or another example of this trend. even worst a whole bunch of independent (and sometimes One of the benefits of this new world is that Australia will work faceless!) people, not just the minister one of us happens to more as one country and one economy; there are fewer and have known since high school. fewer inconsistencies between the states as the years roll on— We’ll also need to get much, much better at explaining what which only makes those that haven’t been fixed all the more our priorities are, so that we can influence where government obvious and aggravating. chooses to go next, rather than always fighting to stop a But one of the consequences is that it will be harder for decision that has already been taken. industry to get the results it wants just by rolling through the That’s why so many people in sector-specific applications are door of a friendly minister. That’s a big change, especially over looking to copy the ALC’s approach of publishing its strategic in the west. plan. In this ‘new Australian Federation’, individual ministers are less It’s the first step to smartening up our act in industry, and that’s and less likely to be in hands on control of their own portfolio, what we’re going to have to do to properly serve the industry, whether it is at state or commonwealth level. in this new Australia. They are more likely to be sitting as members of National Councils (like transport ministers in the Australian Transport Council) or picking the members of independent, national bodies (like the new national truck regulator, Infrastructure Australia, the ACCC, ASIC, and the list goes on).

41 RAIL

WestNet Rail – Growing Western Australia WestNet Rail controls over 5,100km of crucial rail infrastructure throughout the southern half of Western Australia. From grain to alumina, bauxite to iron ore, and interstate freight to passengers on the Perth to Kalgoorlie line, WestNet Rail plays a vital role in protecting and growing Western Australia's economy.

ith the privatisation of Westrail in December 2000, and we are continually striving to create a workplace that is safe, WestNet Rail was granted a 49 year lease by the State team oriented, professional and challenging. W Government to manage the rail freight network. Now WestNet Rail is committed to a culture of safety excellence. We owned by ASX-listed Prime Infrastructure, which in turn is 40% understand that if we want our business to run at its optimum, it owned by Canadian investment group Bookfield, WestNet Rail is must run safely, and we are continually improving safety practices to one of the few independent rail infrastructure providers in the meet the best standards in the industry. world. A successful recapitalisation late last year has brought In recent years, WestNet Rail has experienced strong growth improved access to capital, giving the business a strong platform for increasing the volume of freight hauled on rail by 20 million tonnes growth. per annum to over 50 million tonnes per annum, with aims to reach WestNet Rail is responsible for access management, signaling 100 million tonnes in the next 5-10 years. and communication systems, train control and rail construction and WestNet Rail is well placed to benefit from Western Australia’s maintenance on one of Western Australia’s most important pieces of continuing resource development and growth of the interstate transport infrastructure. freight task. Newly-tapped iron ore deposits developing in the state's To ensure fair network access for industry, an independent rail Midwest region, nickel and iron ore deposits in the Goldfields region access regulator provides a regulatory overview and arbitration and bauxite, alumina and export coal in the south west are likely to mechanism. provide the business with valuable opportunities to grow. WestNet Rail strives to work in partnership with all our WestNet Rail has the experience and expertise to facilitate the stakeholders, both within the commercial and government sector required development of rail infrastructure in Western Australia. We and the local communities within which we operate. We constantly look forward to building on existing relationships and building new drive value and ensure sustainable development, continuous ones with the aim of leading the development of rail freight performance improvement and a safe, people focused culture infrastructure projects throughout the state. throughout all our operations. By investing today, we are investing in the future of the state’s Our people are the heart of our business and with WestNet Rail rail network and Western Australia. teams throughout regional Western Australia, we truly understand the difference each individual makes. Our team is made up of some For further information or to contact WestNet Rail, please visit our of the most experienced and knowledgeable industry professionals website www.wnr.com.au.

RAIL SERVICES

SCT Logistics – Investing in Rail Transportation

SCT Logistics deliver freight around Australia in the fastest, safest and most environmentally friendly way possible.

ith a 30 year history of challenging the boundaries of conventional thinking, they have a reputation as a W company that sets the benchmark for the transport industry in Australia. SCT have built, and now operate, world class rail terminals in Melbourne, Perth, and Parkes, NSW. Plans are now underway for development of a new rail freight centre in Penfield SA, and land has been acquired in Bromelton Qld, for future rail terminal development. With some of the most up to date and efficient locomotives and rolling stock in Australia, SCT Logistics ensures the right equipment for the right freight task, resulting in improved value, flexibility and efficiency for their customers. SCT’s transport model makes them an operator capable of innovative solutions for a variety of freight tasks. Australia today. This new technology offers improved performance The recent investment in the most modern and technologically and enhanced safety. These powerful engines have reduced advanced locomotive fleet in freight transport has enabled them to emissions with two locomotives replacing the three that were run the most environmentally efficient locomotives operating in previously needed to do the same job.

SCT Logistics offers a full complement of transport and logistics services including: Rail and Road Linehaul Services Local Distribution Contract Management Warehousing with Bonded and Refrigerated Facilities Property Development for Distribution Centres Tailored Rail Solutions www.sctlogistics.com.au

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44 MULTIMODAL INTERSTATE FREIGHT IN AUSTRALIA

The Bureau of Infrastructure, Transport and Regional Economics (BITRE), 2010, Interstate Freight in Australia, Report 120, provides estimates and forecasts of interstate freight moving between 56 state-to-state origin-destination pairs. Estimates cover the period 1972 to 2007 and forecasts from 2008 to 2030 (including estimates of the effect of global ﬁnancial crisis). The ﬁgures cover all three major interstate freight modes: road, rail and coastal shipping.

At a glance grow much faster (3.61 per cent per year from 2008 to 2030) than the rate of population growth (1.58 per cent per year) and Total (all modes and all 56 origin-destination (OD) routes) also faster than the average national GDP growth (2.79 per interstate freight grew from 17.8 billion tkm in 1972 to 96.8 cent per year), although with freight growth beginning to billion tkm in 2007, averaging 5.0 per cent growth per annum saturate with respect to GDP, the differential will reduce over and is forecast to grow from 104.6 billion tkm in 2008 to 228.4 time. billion tkm in 2030—equivalent to average annual growth of 3.4 per cent. ‘All modes’ include road, rail and coastal shipping, but excludes air. Total interstate freight estimates and forecasts Although the global ﬁnancial crisis will dampen interstate freight growth (total as well as by each mode) in the early years of the Between 1972 and 2007, the total interstate (sum of all 56 OD forecast period, there will be a substantial rate of interstate routes) freight task by all transport modes (i.e. road, rail and freight growth between 2008 and 2030. coastal shipping) increased at an average annual growth of 5.0 per cent, from 17.8 billion tkm to 96.8 billion tkm. Based on past trends, interstate road freight is forecast to slightly increase its mode share of interstate freight, while rail Between 2008 and 2030, total interstate freight task is and coastal shipping are forecast to slightly decrease their projected to grow from 104.6 billion tkm to 228.4 billion tkm— mode shares. equivalent to average annual growth of 3.6 per cent. The combination of lower GDP growth and reducing Total interstate road freight is forecast to grow from 70.4 billion responsiveness to this growth (saturation in per person freight) tkm in 2008 to 159.1 billion tkm in 2030—averaging 3.8 per results in the lower interstate freight growth rates in the forecast cent growth per year. It is projected to grow fastest on the period compared to the period of the historical estimates. Northern Territory–South Australia OD route between 2008 and 2030. Overall, the total interstate freight task is projected to grow much faster (3.61 per cent per year from 2008 to 2030) than Total interstate rail freight is forecast to grow at an average the rate of population growth in Australia (1.58 per cent per annual growth rate of 3.5 per cent, from 27.1 billion tkm in year) and also faster than the average national GDP growth 2008 to 57.4 billion tkm in 2030. It is forecast to grow faster on (2.79 per cent per year), although with freight growth beginning some routes (e.g. VIC-NSW and QLD-VIC), while several routes to saturate with respect to GDP, the differential will be reducing (e.g. NSW-SA, SA-NSW, QLD-SA and SA-QLD) are projected over time. to decline substantially. Interstate road freight estimates and forecasts The total interstate coastal shipping freight task is forecast to grow from 7.1 billion tkm in 2008 to 11.9 billion tkm in 2030, Between 1972 and 2007, interstate road freight estimates averaging 2.4 per cent per annum. Between 2008 and 2030, increased at an average annual rate of 7.4 per cent, from 5.4 NSW-NT is projected to decline by 0.6 per cent per annum. billion tkm to 64.7 billion tkm (Figure ES.1). FES.1 Total interstate (sum of all 56 OD routes) freight estimates and Between 2008 and 2030, the freight task on the North-South forecasts by transport mode, 1972–2030. corridor is projected to grow faster than that on the East-West corridor. Between 2008 and 2030, the total interstate road freight task is projected to grow from 70.4 billion tkm to 159.1 billion tkm— Road freight has been the dominant mode on the North–South equivalent to average annual growth of 3.8 per cent (Figure corridor, while interstate rail freight has been the main transport ES.1). And between 1972 and 2007, road freight trafﬁc on 34 mode on the East-West corridor. OD routes experienced positive growth.

Overall, the total interstate freight task in Australia is forecast to The highest average annual growth rates were on the Western

45 Figure ES.1 Total interstate (sum of all 56 OD routes) freight estimates and forecasts by transport mode, 1972-2030

250

Estimates Forecasts

200

150

100

50 Interstate freight task by mode (billion tonne kilometres) Interstate freight

02 020 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 20 2004 2006 2008 2010 2012 2014 2016 2018 2 2022 2024 2026 2028 2030 Note: From 1972 to 2007 are estimates; while from 2008 to 2030 are forecasts. Coastal shipping Rail Road Source: BITRE estimates.

Australia-South Australia, South Australia-Western Australia interstate rail freight traffic was on the routes from Western and the Queensland-Victoria routes. Although Victoria- Australia to the three major eastern states (New South Wales, Northern Territory grew substantially, the interstate road freight Victoria and Queensland). task only started in the mid-1980s. Although interstate rail freight task on the Victoria-Northern Generally, due to different levels of responsiveness to economic Territory route grew substantially, the rail freight task only activity, some routes are forecast to grow faster than other started in the mid-1980s. routes during the 22 years from 2008 to 2030. Interstate road freight is projected to grow fastest on the Northern Territory- Due to different levels of responsiveness to economic activity, South Australia OD route. However, several OD routes are over the next 22 years (2008 to 2030), interstate rail freight forecast to grow negatively. On the other hand, some OD tasks on several routes (e.g. NSW-SA, SA-NSW, QLD-SA and routes and routes which are linked with Tasmania do not have SA-QLD) are projected to decline substantially, while interstate any road freight traffic. rail freight tasks on some routes (e.g. VIC-NSW and QLD-VIC) are expected to grow faster. Interstate rail freight estimates and forecasts Interstate coastal shipping freight estimates Between 1972 and 2007, the interstate rail freight estimates and forecasts increased at an average annual rate of 4.2 per cent, from 6.1 billion tkm to 25.2 billion tkm (Figure ES.1). Between 1972 and 2007, the interstate coastal shipping freight task grew marginally, at an average annual growth of only 0.2 Between 2008 and 2030, the total interstate rail freight task is per cent, from 6.4 billion tkm to 6.8 billion tkm (Figure ES.1). projected to grow from 27.1 billion tkm to 57.4 billion tkm— equivalent to an average annual growth rate of 3.5 per cent Between 2008 and 2030, the interstate coastal shipping freight (Figure ES.1). task is projected to grow from 7.1 billion tkm to 11.9 billion tkm—equivalent to average annual growth of 2.4 per cent Between 1972 and 2007, interstate rail freight traffic grew (Figure ES.1) positively on several OD routes, and the largest growth of

46 Due to different levels of responsiveness to economic activity, cent, from 9.9 tkm to 65.4 billion tkm, while it is projected to during 1972 to 2007, interstate coastal shipping freight tasks grow at an average annual rate of 3.9 per cent between 2008 grew substantially (more than 8.0 per cent per annum) on the and 2030 (from 71.7 billion tkm to 165.9 billion tkm). VIC-SA, TAS-WA and WA-TAS routes, while it declined on 20 OD routes. The interstate road freight task on the North-South corridor increased at an average annual growth rate of 7.3 per cent, Among these 20 OD routes, interstate coastal shipping freight from 4.7 billion tkm in 2007 to 56.2 billion tkm in 2007, while it task on the SA-TAS, QLD- VIC and QLD-NSW OD routes is expected to grow in the future at an average growth rate of declined by more than 7.0 per cent per annum during this 3.8 per cent, from 61.4 billion tkm in 2008 to 139.2 billion tkm period. in 2030. Again, much of the explanation for the lower forecast growth rate lies in assumed lower economic growth, plus the Interstate coastal shipping freight tasks are forecast to grow growing saturation effect. positively over the next 22 years (2008–2030) on many of the interstate OD routes, while NSW-NT is projected to decline by The interstate rail freight task on the North-South corridor has 0.6 per cent per annum. increased slowly, from 3.5 billion tkm in 1972 to 8.0 million tkm in 2007, an average annual growth of 2.4 per cent. Between Interstate freight estimates and forecasts on 2008 and 2030, it is projected to grow at an average annual the North-South and East-West corridors rate of 4.7 per cent, from 8.8 billion tkm to 23.9 billion tkm. Between 1972 and 2007, the interstate coastal shipping freight North-South corridor task showed an irregular pattern and overall showed a decline, Between 1972 and 2007, the total interstate freight task on the averaging -1.0 per cent per year, falling from 1.7 billion tkm in North-South corridor (sum of road, rail and coastal shipping 1972 to 1.2 billion tkm in 2007. Between 2008 and 2030, the freight) increased at an average annual growth rate of 5.5 per interstate coastal shipping freight task is, however, expected to

47 grow at an average annual growth of 2.7 per cent, from 1.5 billion tkm to 2.8 billion tkm.

Interstate road freight mode share on the North-South corridor has increased signiﬁcantly over the past 35 years, from 47 per cent in 1972 to 86 per cent in 2007 due to duplication and improvements to the highway and vast improvements in truck productivity (i.e. 6 axle articulated trucks, B-doubles etc.). It is forecast to decrease slightly to 84 per cent in 2030.

Interstate rail freight mode share has declined signiﬁcantly, from 35 per cent in 1972 to 12 per cent in 2007 as competition from road became more intense. This was specially the case on the short North-South routes where rail ﬁxed costs at either end weighted heavily against it. It is forecast to increase slightly until 2030 (14 per cent).

Between 1972 and 2007, the interstate coastal shipping freight mode share declined sharply to a low in 1988. Even more than road, coastal shipping cost effectiveness is limited for the short North-South routes by the high ﬁxed costs of going through the ports at either end.

Interstate coastal shipping freight mode share is expected to remain the same until 2030.

East-West corridor Between 1972 and 2007, the total interstate freight tasks on the East-West corridor (all transport modes) has grown share on the corridor is expected to decline slowly until 2030 signiﬁcantly, from 3.3 billion tkm to 18.3 billion tkm—equivalent under current arrangements. to average annual growth rate of 5.0 per cent. Between 2008 and 2030, it is projected to increase from 19.1 billion tkm to The rail freight share increased sharply to 1977 as coastal 38.6 billion tkm, an average annual growth rate of 3.3 per cent. shipping collapsed and then decreased gradually until 1998 as road became competitive. It then increased slowly to 2007, as Historically, rail has been the main mode of interstate freight infrastructure improvements lowered costs and improved transport and it is expected to continue to dominate on the service. The forecast rail mode share is expected to remain East-West corridor, due to the long distances. Between 1972 relatively stable. and 2007, the East-West interstate rail freight task has increased from 1.3 billion tkm to 10.7 million tkm, at an average The road freight share of East-West trafﬁc increased from 7 per annual growth of 6.1 per cent. Between 2008 and 2030, it is cent in 1972 to 45 per cent in 1996 due to the sealing of the projected to grow at an average annual rate of 3.1 per cent, highway and vast improvements in truck productivity (i.e. 6 axle from 11.3 billion tkm to 22.3 billion tkm. articulated trucks, B-doubles etc.), and then dropped to 29 per cent in 2007 as coastal shipping was resurrected. Between Although the East-West interstate road freight task grew 9.3 2008 and 2030, road freight share is projected increase to 34 per cent per annum between 1972 and 2007, the initial value per cent. was very low (0.2 billion tkm in 1972 which increased to 5.3 billion tkm in 2007). By 2030, the East-West interstate road freight task is expected to grow to reach 13.0 billion tkm, an Comparison between corridors average growth rate of 3.8 per cent per year. Between 1972 and 2007, the total interstate freight task (tkm) by all modes grew faster on the North-South corridor than on Between 1972 and 2007, the East-West interstate coastal the East-West corridor. shipping freight task showed an irregular pattern, resulting in an overall increase of just 0.7 per cent per year, from 1.8 billion Between 2008 and 2030, the total interstate freight task on the tkm to 2.3 billion tkm. Between 2008 and 2030, East-West North-South corridor is projected to grow slightly faster coastal shipping is expected to increase from 2.0 billion tkm to compared to the East-West corridor. Interstate road freight has 3.4 billion tkm, an average annual growth of 2.3 per cent. dominated on the North-South corridor, while interstate rail freight has been the main transport mode on the East-West Between 1972 and 1976, the interstate coastal shipping freight corridor. mode share declined sharply due to cessation of the uneconomic service. Thereafter it remained stable until the This is a summary of Multimodal interstate freight in advent of the single and continuous voyage permit system in Australia—Research Report 120. A full report can be the late 1990s. However, the interstate coastal shipping freight downloaded from http://www.bitre.gov.au

48 PACKAGING Transport Certification Australia (TCA) and the Intelligent Access Program (IAP)

he IAP is an Australian Transport Council reform and has been T developed at a time when the Australian road network is facing increasing challenges. Whilst traditional reforms have served Australia well, authorities and industry require smart solutions to move forward. The IAP is an effective, efficient, non- intrusive approach that delivers unparalleled assurance and productivity gains. One of the many benefits of the IAP is its ability to accurately monitor compliance. In turn authorities and industry have new opportunities to optimise vehicle operations safely, efficiently and productively. Another important feature of the IAP is its ability to combine regulatory and commercial fleet management services. This ensures that the public and private 1. Policy and Regulatory Framework The IAP provides a nationally agreed benefits of IAP can be realised. 2. Functional and Technical Platform platform to support the current and future The IAP provides a nationally agreed 3. Operational Environment telematics business needs of governments. and compatible: 4. Commercial Setting

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49 SAFETY CODES UNDERPIN INDUSTRY ACCOUNTABILITY AND BEST PRACTICE

The Australian Logistics Council (ALC) has a strong focus and commitment to see the National Logistics Safety Code (NLSC) become the nationally consistent platform for the logistics industry’s solution to Chain of Responsibility.

ALC has written to all Transport Ministers supporting a nationally we can demonstrate that we have taken reasonable steps to consistent approach to Chain of Responsibility (CoR) laws, as comply with all relevant laws. well as appropriate industry driven compliance measures as part 7. We acknowledge and accept that our obligations include of the framework for national heavy vehicle regulation. queuing and scheduling requirements, loading and unloading facilities and equipment, well maintained, appropriately ALC supports and encourages industry driven compliance with designed, and equipped vehicles, fatigue management, driver CoR through the NLSC and the Retail Logistics Supply Chain health and safety, and safety and security requirements (RLSC) Code of Conduct. generally. The RLSC Code of Conduct commenced development in late 8. We will cause all contracts or arrangements between us to 2005 at which time a draft was developed by a working group include compliance with this Code of Conduct as a material established by the ALC. requirement. 9. We acknowledge and accept that cost alone should not be On 14 November 2006 the RLSC was launched in Melbourne. the determining factor in meeting our obligations under this Implementation of the RLSC commenced from January 2007. Code. Woolworth’s, Coles Myer, Metcash, Toll Holdings and Linfox are 10. We will actively support and assist the National Transport the inaugural signatories of the Retail Logistics Supply Chain Commission to meet its responsibility to develop uniform or Code of Conduct (Figure 1). Despite the code being a voluntary nationally consistent road transport regulation and initiative, the number of signatories has now increased to 46 operational reforms. since its launch. In September 2007, ALC in partnership with the National Reiterating the commitment of Toll Holdings to the code, group Transport Commission (NTC), conducted a national Safety managing director Mr. Paul Little said that the code was an Summit in Melbourne. This summit was attended by 85 senior opportunity for industry to self regulate and embrace the leaders of business, government and industry associations who challenge to ensure safety through a concept that would engage adopted four resolutions: everyone involved in the process including customers, in this case the retail industry. 1. T&L Industry leaders committed to “T&L Vision Zero” believing that there is no level of acceptable deaths or injuries The signatories agreed to the following ten points. in our industry and that if it can’t be done safely then it can’t be done. They agreed to shamelessly share their experiences 1. We recognise and accept our obligations in the transport and their progress and that safety is not a competitive issue. chain of responsibility to maintain and promote safe 2. The leaders also agreed that efforts must take on a supply operations. chain focus and that the support and involvement of all 2. We undertake to comply with all road transport laws applying governments, industry leaders, peak bodies and associations to our operations and with the letter and spirit of these laws. and unions would be essential. 3. As retailers, we will not knowingly make any demand or 3. They agreed that a single T&L industry safety code must be impose any requirement that would cause any logistics developed as soon as possible and that ALC had a supplier to breach these laws. responsibility to lead the process 4. As logistics suppliers, we will not knowingly meet any 4. Finally they asked ALC to convene and lead a National T&L demand or requirement that would cause us to break the law Safety Group in partnership with NTC. and will immediately notify a retailer if any demand or requirement may cause us to do so. In 2008, ALC in conjunction with representatives from RLSC and 5. We will actively support the development of industry codes of the Australian Steel Industry (ASI) began a process to bring practice or guidelines. together the RLSC and ASI code of practice to develop the NLSC. 6. We will also ensure that we have in place suitable and adequate processes, programs policies and training so that

50 Harmonisation of the two codes was completed in November » Driver fatigue management including driver health 2008 and subsequently launched at the ALC Forum in February » Speed compliance 2009 in Melbourne. At this forum NTC clearly endorsed the » Vehicle safety. NLSC and welcomed industry taking the necessary steps to improve safety in the T&L industry. In February 2010, ALC in conjunction with the RLSC Management Committee conducted a workshop in Sydney to NLSC supports a clear chain of responsibility in freight logistics, discuss progress of the RLSC and identify key areas that involving all parties in the operation from the retailer to the carrier signatories felt needed to be considered by the RLSC and logistics provider. In setting clear operational and management committee in shaping an agenda for year ahead. administrative guidelines for compliance with the spirit and letter of law, the code recognises the importance of public safety The following RLSC 2010 agenda areas have been established throughout the entire supply chain. as a result of signatory feedback from this workshop:

The code prescribes minimum levels of operational behaviour to » Communication of RLSC – ensure effective assist those in the NLSC to manage their obligations under the communication of the code and the value it delivers. relevant road transport laws and occupational health and safety » Fast Moving Consumer Goods (FMCG) Vendor legislation. Engagement – increase the participation of FMCG organisations in the Code. ALC believes the NLSC offers an opportunity for industry to » Education and understanding of RLSC – to provide better respond in a coordinated way to produce a clear and equitable education to signatories on the RLSC and its workings. alignment of responsibility for carriage of goods within the chain. NLSC applies to regulation and standards applying to the » RLSC Auditing regime improvements – review the RLSC following activities within the supply chain: auditing approach and framework of documentation, training and guidance tools to deliver improved levels of » Chain of Responsibility signatory compliance. » Occupational Health & Safety » Policy and procedures in FMCG/Retail freight planning/ » Scheduling and transit times execution – deliver a step change in the safety of the FMCG to Retailer primary freight journey through the » Time slot management improvement of industry wide policy and procedures in » Safe loading practices including mass, dimension and freight planning/execution. load restraint

Retail Logistics Supply Chain CODE OF CONDUCT Recognising the need for a safe and efﬁcient transport function, in our interests, and in the wider interests of public beneﬁt and safety, we adopt and agree to this Code of Conduct and its Guidelines. 1. We recognise and accept our obligations in the transport chain of responsibility to maintain and promote safe operations. 2. We undertake to comply with all road transport laws applying to our operations. 3. We, as manufacturers, suppliers, retailers or logistics suppliers, will not knowingly make or meet any demand or requirement that would cause us to breach road transport laws applying to our operations. 4. We will actively support the development of appropriate industry Codes of Conduct, Codes of Practice and Guidelines for the purpose of promoting compliance with road transport laws. 5. We will also ensure that we have in place suitable and adequate processes, programs policies and training so that we can demonstrate that we have taken reasonable steps to comply with all relevant laws. 6. We recognise and accept that our obligations include queuing and scheduling requirements, loading and unloading facilities and equipment, well maintained, appropriately designed and equipped vehicles, fatigue management, driver health and safety and safety and security requirements generally. 7. We will cause all new contracts or arrangements between us to include compliance with this Code of Conduct as a material requirement. 8. We recognise and accept that cost alone should not be the determining factor in meeting our obligations under this Code. 9. We will actively support and assist the National Transport Commission to meet its responsibility to develop appropriate uniform or nationally consistent road transport regulation and operational reforms. 10. This Code and the Retail Logistics Supply Chain Code Guidelines are intended to be read together.

51 SAFETY

A new perspective on level crossing safety

Today’s trains are bigger, faster and quieter than ever, and there are more of them. QR operates about 1,000 services a day, across approximately 10,000 kilometres of track which is protected by around 1,800 level crossings around the state.

rom January 2001 to December 2009 there were 157 collisions with road Fvehicles at level crossings across Queensland and 11 collisions with people. This resulted in 18 fatalities and 44 serious injuries. In addition to this a further 3,339 level crossing incidents were reported, ranging from near misses through to infrastructure being damaged. Research indicates almost all level crossing incidents are due to the road user ignoring the warning signals and signage. To address this serious public issue, QR embarked on a new safety campaign to target road users, to change attitudes and behaviour around level crossings. For the first time, the campaign highlighted the stories of the often unheard victims of these tragedies, and the near misses at level crossings – the train drivers. The campaign focussed on the men and women who go to work and feel their lives are being put at risk through thoughtless and irresponsible actions of motorists, and the subsequent impact on their families. By approaching level crossing incidents from a ‘human cost’ perspective, QR colleagues in the ‘QR family’ and saw many and increased reach of the safety message. introduced the physical and emotional of the 15,000 staff share the story with The campaign response was impact on the person at the controls of the their family, friends and the wider overwhelmingly positive, with more than train, with the aim of having a more direct community, as the message spread virally 2,000 pieces of feedback received. and personal message to motorists who across the globe. In collaboration with other activities interact with level crossings. The campaign The Driver’s Plea video recorded more including the QR Community Education developed a strong emotional theme by than 500 unique visits within 24 hours of Team visits (direct contact with over revealing the confronting stories of real going live on the QR website and 22,424 150,000 community members in 2009), people affected by this issue, and why it is views in total. The media support of the engineering upgrades to level crossing campaign resulted in more than 50 news so important that attitudes and behaviour infrastructure and increased enforcement articles reaching an audience in excess of towards level crossing safety is changed. by police, QR data on collisions with The campaign was called ‘Driver’s Plea’ 500,000 people, including a feature on A infrastructure has shown a 54% drop in and QR employees were the initial target Current Affair. The video was also discussed broken boom gates and a steady decline in audience. A campaign pack with DVD was widely on talkback radio, generating level crossing collisions over the last year. sent directly to employee homes and the increased awareness and discussion around video was posted on the RailSmart.com.au level crossing safety. To view QR’s Driver’s Plea campaign that website. This campaign included a call to In addition, 22 organisations ranging successfully engaged a workforce and action for road users to simply be patient from local groups to international transport delivered important safety messages and more alert around level crossings. companies requested copies of the to the community, visit The emotive campaign connected with campaign pack, forging strong partnerships www.RailSmart.com.au/driversplea.

52 “We just want people to get home safely” Peter Doyle, Train Driver

Everyday, train drivers face the real danger of motorist behaviour at level crossings. Incidents can have far-reaching impacts on train drivers and their families.

Make sure everyone makes it home safely.

QR values our train drivers and the community, please take care at railway level crossings.

Be aware. Stay alert. Be RailSmart.

To hear more from train drivers visit RailSmart.com.au SMARTER SUPPLY CHAIN

How Smarter Supply Chains Evolve

While supply chain practice has evolved significantly over recent decades, the fundamental analytical framework of supply chain development remains effective. It is the combination of data collection, modelling, simulation, and solution design that provides the insight of complex operations and the basis for informed decision making.

he most critical step is to collect Figure 1 An Analytical Framework for Supply Chain Development relevant and accurate data of existing Tsupply chain operations. Without quality data, no accurate analysis can be done. Recording and processing large volumes of data has become practical and cost-effective due to the advancements in information technology. Most ERP applications have SCM modules that enable businesses to collect operational data. New data capturing technology, such as bar- coding, RFID, GPS, mobile computing, etc, are more frequently being used replacing manual data entry methods. Whilst modern technologies give us more data than ever to be at our disposal, the challenge is how to transform the data into meaningful information to support business decisions. The process starts with scenarios are simulated and evaluated. There is understanding business priorities. As businesses hardly a perfect model; rather a model should be differ in their strategies, so do their supply chosen to pursue certain supply chain objectives, chains. For example, a luxury goods merchant such as distribution network optimisation, driving may require low inventory but expedient order down total logistics costs, or a reduction of fulfilment, while a discount retailer may prefer supply chain carbon emissions. low unit logistics cost and constant product The outcomes of the exercise will result in availability. The traditional approach is to use identification of areas that can be potentially quantitative methods to analyse supply chain improved, and/or supply chain models that can performance. Key performance indicators (KPI) be adopted to meet the prioritised business are popular measures of operational, customer requirements. This often leads to a series of service and financial performance. Repeating the projects, which if executed, will add value to the retailers’ example, financial KPIs such as inventory business from a SCM perspective. Where turnover and landed costs, and operational KPIs analytical and creative minds meet, innovation such as delivery-in-full-on-time (DIFOT) and order takes place. Whether it is a major transformation, lead-time can be used to measure how well or a minor operational step-up, the supply chain business priorities are being achieved through supply chain management. The KPIs are then becomes more aligned to the overall business. By benchmarked against the business’ historical and identifying the limitation of its supply chain, peer performance to evaluate any improvements businesses can employ better technologies, skills, and identify new opportunities of development. and processes to change the status quo. That’s Another method is to use simulation how smarter supply chains evolve. techniques. Supply chain data, captured through If you would like to discuss the topic further you various channels, are modelled using specialised may contact the writer on [email protected] applications. Current model and multiple to-be or (02) 8917 5512 SMART SUPPLY CHAINS FOR COST AND CARBON SAVINGS

The Australian Logistics Council (ALC) has called for a regulatory environment for smart technology and communications in supply chain.

In a recent discussion paper, the ALC said smarter supply “The most efﬁcient supply chains worldwide leverage real-time chains have the potential to improve efﬁciency and productivity, information and ensure real collaboration between partners, provide cost savings to consumers, and reduce carbon whether this is within a closed-loop, across the industry, or emissions. across the entire economy,” he said.

To do this, the ALC proposes integrating the disparate Currently, the competition law on the sharing of information information held by supply chains so that logistics companies across the transport and logistics supply chain does not allow and other transport groups can access the data to reduce such a scheme to operate. But the ALC hopes the estimated time, expense and effort. $1.5 billion in savings with every 1 per cent increase in efficiency will convince the government to establish laws and A common portal would bring together information on supply provide funding to make gathering and sharing information a chain and goods and services from all transport and logistics modes such as road, rail, sea and air. It would ideally hold all reality. route information, monitor the flow of freight traffic and each Savings in carbon emissions add to the appeal of an integrated operating element, and keep track of each physical element. system. ALC CEO Michael Kilgariff said, “Transport and Logistics Mr Kilgariff said that Smart Supply Chains must be sustainable, companies hold a unique position in the supply chain because adding that “…it is clear that the enhancements that have most they are typically high users of existing and new information.” economic benefit come with efficiencies that will accelerate the Mr Kilgariff said that a lack of framework to clearly stipulate reduction of CO2, but there is more that can be done to government requirements in regards to information-sharing enhance the reduction of CO2 with innovative ICT applications.” creates regulatory uncertainty, and hampers the improvement of supply chain performance. “The ideal Logistics System smoothly delivers goods where they are needed, when they are needed with the least amount of cost, energy, carbon, pollution, noise, congestion and harm. This involves minimising wait time and handling during the transport of goods to their final destination,” he added.

Mr Kilgariff also highlighted the difference between freight transport, where consistent pace is the key, and passenger transport, where high speeds between stations is important.

“The difference in requirements highlights the need to have dedicated freight corridors (linking key nodes) that can run large volumes of freight at steady speed, timed to load/unload at each node.

This has the added advantage of keeping down total cost, energy, carbon, pollution and noise, as well as reducing congestion and improving safety, including on passenger networks, which may currently be operating on the same infrastructure.”

Mr Kilgariff added that the Council of Australian Governments (COAG) has recognized this and agreed to national objectives and criteria for the future strategic planning of Australia’s capital cities.

The ALC Discussion Paper, A Smarter Supply Chain— Using ICT to Increase Productivity in the Australian Transport Logistcs Industry, is available from the ALC website at www.austlogistics.com.au

55 LOGISTIC EXCELLENCE Patrick Autocare wins Toyota Supplier Of The Year – Delivery 2010 with its ‘shore-to-door’ automotive logistics solution.

Patrick Autocare provides a total supply chain solution to the motor vehicle industry in Australia. Autocare’s unique services include motor vehicle processing, transportation and storage for Australia’s major importers and exporters.

he world leading ‘shore to door’ offering of a fully integrated service Tfrom wharf arrival to dealer delivery is built upon two unique elements: on-wharf processing facilities around Australia, and an IT system that tracks individual cars well before they reach an Australian port. The fully integrated service reduces transport costs and delivery lead-times as well as inventory costs. Patrick Autocare processes in excess of 450,000 vehicles on-wharf and transports over 600,000 vehicles each year. They also offer customers vehicle storage facilities, both on and off wharf, motor vehicle inspections, rectification and specialist fitments and dealer services. As the Automotive industry has undergone change and volatility in recent documented around the globe. In initiatives. Since 2003 the Joint Quality years, Patrick Autocare, with its dedication partnership with Toyota Australia, Patrick Circle Program has reaped such benefits as to customer service, has managed these Autocare has adopted these principles and improved ETA accuracy, reduced insurance changes by providing flexible, innovative continually strives to improve performance turnaround timings, safety enhancements and reliable supply chain solutions. and customer satisfaction. and improved quality measurement & Toyota Motor Corporation Australia has The partnership with Toyota has performance. The Quality Circle Program been one of Patrick Autocare’s major has been the platform which promotes our customers since 1969. Toyota’s resulted in many improvements over the companies in partnership, which results in commitment to Quality, Continuous years, with the Joint Quality Circle Program business improvements of mutual benefit. Improvement & Respect for People is well being the main driver of key improvement Reward and recognition are part of the Toyota Way. In 2010, Toyota recognised Patrick Autocare’s commitment to Vehicle Logistics and awarded the Company with a Supplier of the Year Award in the Delivery category. Patrick Autocare won the award for their ability to consistently meet Processing & Delivery KPIs. Patrick Autocare was also one of three companies shortlisted for the overall Supplier of the Year award. “Winning this award and being shortlisted for another has increased the team’s determination to develop further our world leading, best practice “shore to door” vehicle logistics service offering’, said Patrick Autocare General Manager, Alex Milan at the award Toyota President, Senior Toyota Executives & Award Winners ceremony.

56 INNOVATION

Innovative intermodal rail services offer a safer, greener, cost-effective alternative to road

The growth of Intermodal rail freight over the past 10 years is one of the success stories of the Australian logistics industry. Following a long period of decline in the use of rail and a concentration on road freight over the second half of the 20th century, the development of integrated road/rail solutions- Intermodal solutions- has seen a resurgence in the rail freight industry during the first decade of the 21st century.

t the forefront of this renaissance is increased obligations under Chain of LCL/parcel freight and refrigerated freight. Pacific National Intermodal (PNI), Responsibility legislation Pacific National has made the conversion A Australia’s largest rail freight Most interstate Intermodal rail freight is from road to rail easy for customers by provider for containerised freight. Born in carried by PNI on its well known offering supply of suitable containers, and 2002 through the privatisation of Superfreighter services. These economical, can even arrange local pick up and delivery. Government owned entities National Rail efficient trains, up to 1800 metres long, In this way, customers who have not yet Corporation and FreightCorp, Pacific double stacked and weighing around 5000 invested in container equipment can still National Intermodal is now a division of the tonnes provide daily services between get all the benefits of Intermodal rail. top 50 ASX listed entity, Asciano. major capital cities in the mainland states of Intermodal rail is poised for continued Users of freight are increasingly Australia. growth as customers demand more cost recognising that intermodal freight has A more recent innovation is Pacific effective and environmentally friendly many advantages over pure road freight National’s Express product. Operating from transportation solutions. PNI Divisional solutions, particularly over long distances. the East Coast states to Perth and back, General Manager, Chris Keast, is confident These advantages include: these trains are faster than the standard of a strong future saying, “With the total 3 Lower cost—an efficient Intermodal Superfreighter, and operate on premium Australian freight task expected to grow solution can bring major savings in cost priority train paths, which mean shorter significantly over the next twenty years, 3 Maintaining product quality—goods, transit times. The result is a service that governments are increasingly seeing the once packed in a container, are not allows for late night dispatch from benefits of improving rail infrastructure. subject to multiple handling prior to Melbourne and Sydney and reliable, early They are addressing important areas of ultimate delivery. morning third day delivery in Perth, reform by streamlining regulations, 3 Safer mode of transport—rail provides equivalent to a road outcome in all increasing investment, recognizing the a vastly reduced risk of accident en respects, but without many of the environmental, safety and congestion route problems. The PNI Express solution has benefits of rail use in project evaluation, 3 Environmental benefits—with many been the fastest growing part of the PNI and reviewing heavy vehicle road user end users seeking ways to reduce the business over recent years as customers charges. As the sector benefits from these carbon footprint of their business, rail have converted from road to this cost initiatives, Pacific National will be there has significant advantages in this regard effective Intermodal solution. leading the way, delivering innovative and 3 Less onerous legislative compliance— The PNI Express service is particularly sustainable services to our valued particularly in an environment of suited to time sensitive freight, including customers.”

57 PORTS

Westgate Ports: Building on the Victorian Government’s Freight Strategy

he Port of Melbourne currently handles over 2.1 million TEU pa. with forecast growth to 8.0 million by 2035. The T physical constraints on the Port (which is in the heart of the city) and the congestion and pollution generated by Port traffic are driving calls to change the way containers are moved in and out of the Port. In response to this challenge, the Victorian Government has proposed to establish three ‘Metropolitan Freight Terminals’ (MFT) sited at strategic locations within the Melbourne Metropolitan area adjacent to major freeways and rail lines that link directly to the Port of Melbourne. In support of this strategy, Westgate Ports (WGP) has recently spent $100 million to establish operations at Victoria Dock (in the Port of Melbourne) and to acquire land at key locations within the Melbourne Metropolitan area for the purposes of establishing a network of ‘Inland Ports’. To get the terminals operating, WGP will be using a fleet of ‘High Productivity Vehicles’ (each able to take 4 x TEU) running on Westgate Ports believes these initiatives will benefit customers, dedicated lanes on the freeway at night. Simultaneously, new rail other transport companies using the terminals and the local infrastructure is being built (with government funding) to move as community—by reducing costs and congestion and by improving much metropolitan Port freight as possible onto rail. safety and reliability throughout the entire supply chain.

Complete Logistics Experts at the Port of Melbourne

ROAD – RAIL – SEA – INLAND PORTS

58 PORT OPERATORS: A SHIP SHAPE INDUSTRY RESHAPES

Over 27,000 ships visited Australian ports in 2007-08. As the entry for imports. In the eight years to 2007-08 the value of point of entry and exit of over $300 billion in goods, or 70% of imports and exports moving across Australian wharves roughly all imports and 80% of exports by value, Australia’s 46 ports doubled in value from $154.6 billion to $303.4 billion while the are busy places. weight of these goods increased by 50% to 789 million tonnes. Containerised and non-containerised trade is expected to Most major ports in Australia are government owned and increase in volume by 5.4% and 3.9% a year up to 2024-25. operated by appointed ports corporations. Ports generate their income partly by levying the movement of cargo across ports Merchandise trade and partly by leasing land and port facilities to port users. 24 Revenue earned by companies in the Port Operators industry is expected to grow by an annual average of 5.1% over the ﬁve 18 years to June 2010 to reach $2.35 billion. 12 Market Share 6 Gladstone Ports Corporation Limited 9.0%

Sydney Ports Corporation 9.0% % change 0 Port of melbourne Corporation 8.4% -6

Melbourne ports are the exit point for the largest share of -12 exports by value, while Dampier and Port Hedland are the Year 01 03 05 07 09 11 13 largest exporters by weight. Sydney dominates as the point of Source: www.ibisworld.com.au

59 The two factors shaping the growth and geographic spread of terminal in central Queensland (between Rockhampton and port operators in Australia are the boom in mining export Mackay), the state’s ﬁrst new export terminal in 25 years. activities and the rising price of oil. A number of resource ports will have their capacities doubled over the next ﬁve years, with The proposed site is only around 200km from the Port of the ability to handle over 100 million tonnes of cargo a year. Gladstone, currently Queensland’s largest coal port. One reason for not simply expanding the Gladstone port further The largest growth in capacity will be at regional ports rather stems from increasing nervousness in the mining industry than capital city ports. Ports are not only expanding in capacity, about the price of oil and its impact on the costs of getting but also proliferating in number. Recent plans have been commodities to port. Transporting coal and ore by land is more announced to create new and large-scale commodities ports in expensive than doing so by sea and mining companies are the Mackay area of Queensland and in the Pilbara region of increasingly aware that record rises in oil prices have the Western Australia. This is in contrast to the traditional trend of potential to affect their bottom line quite considerably. having one or two ports serving huge geographical areas. Rising land transport costs and the increased intensity of During 2007 the Western Australia State Government mining in regional locations mean that the business case for undertook a preliminary study for a new iron ore port with a locating ports at smaller intervals from each other is strong. capacity of up to 300 million tonnes per year. To be located in IBISWorld predicts that in the long-term, an increasing number the Port Hedland region, it is likely that the proposed port will of medium-sized ports may be constructed in the resource be open for business by 2017. mining regions of Queensland and Western Australia, as the port industry reshapes itself for shifting volumes. In mid-2008, a plan was proposed by the Queensland State Government to build a 100-million-tonnes-per-year coal export (SOURCE: IBIS WORLD)

60 Setting a mark in Australia’s cold chain logistics industry

As one of Australia’s leading third party cold chain logistics The company continues to be recognised as an industry service providers, Costa Logistics continues to set the leader with highlights including the Coles award for “Most standard in the industry. improved site for safety”, the “Top Transport and Logistics As part of the Costa Group which was established in the 1880s, Provider” and a “Highly Commended” in the Logistics Leader Costa Logistics continues to go from strength to strength category of the 2009 Mercury Awards. providing multi-user sites across the country to address the Costa Logistics Services: needs of consumers and customers.

The nationwide coverage is backed by state-of-the-art IT TRANSPORT SOURCING systems. A multi-million dollar upgrade of its Manhattan MANAGEMENT software in 2009 ensures Costa Logistics continues its commitment towards remaining as responsive and ﬂexible as possible to meet changes and ﬂuctuations in client and ^dKZ' s>h/E' consumer demands. The IT upgrade offers the company’s ^/E'>h^ZͬDh>d/h^Z Z>>/E' ^/E'>ͬDh>d/dDW ^,>&ͲZzW/E' CONTAINERS target market segments which include FMCG, retail, household W//d/KE

BRIDGING THE GAP Delivering outstanding cold chain solutions through excellence in knowledge, technology and determination ph: +61 3 9931 3333 www.costalogistics.com.au PROPERTY SERVICES

Thinking Industrial and Logistics Property Solutions? Think Savills.

Competent corporate real estate advice is a critical business issue. Making the right decisions regarding industrial and logistics services in real estate can have a significant impact on future business costs, corporate culture and ultimately profits.

We provide solutions for companies that 3 Fuji Film 3 Sales and leasing are: 3 Thorn Lighting 3 Logistics solution services 3 Changing corporate direction and 3 Toll 3 Valuations priorities 3 Strandbags 3 Asset Management 3 Growing and expanding operations 3 Coca Cola 3 Project Management 3 Downsizing or consolidating operations 3 Fisher & Paykel 3 Corporate Real Estate Services 3 Responding to pressure to reduce 3 Hasbro 3 Facilities Management operating expenses 3 Cadbury Schweppes 3 Research 3 Managing the impact of job migration 3 Linfox and demographic shifts on current To discuss your Industrial and Logistics property 3 Queensland Cotton locations requirements, contact Savills. 3 Visy Through a professional and diligent INDUSTRIAL – NSW 3 Manassen Foods process, we seek to gain a detailed Parramatta – Darren Curry Our unique combination of sector Tel: 02 9761 1333 understanding of the business objectives of knowledge and entrepreneurial flair gives Email: [email protected] our clients before we embark on any clients access to real estate expertise of the Liverpool – Ray Trimboli project. We recognise that our clients have Tel: 02 9601 3100 highest calibre. individual goals and objectives and together Email: [email protected] Globally, Savills is a leading real estate we develop a tailor-made real estate INDUSTRIAL – QLD service provider listed in the London Stock strategy, devised specifically for them and Graham Norris Exchange. With over 200 offices and Tel: 07 3221 8355 not an off the shelf solution. associates worldwide, Savills provide clients Email: [email protected] Our industrial and logistic services with innovative property solutions and INDUSTRIAL – SA division is an integrated national team that expertise in sales, leasing, valuations and all Steve Bobridge has a proven ability to leverage off local Tel: 08 8237 5000 aspects of property and business relationships as well as major institutional Email: [email protected] management. owners, thus exposing your potential INDUSTRIAL – WA Across the Asia Pacific Region, Savills requirements to the widest possible market. James Condon have 46 offices across 40 cities and In Tel: 08 9488 4111 Companies Savills Australia have Australia we have 13 offices across the Email: [email protected] partnered with to provide warehouse country and an alliance with Barfoot and INDUSTRIAL – VIC logistics solutions include: Thompson in New Zealand completing the Melbourne – Greg Jensz 3 BlueScope Steel circle and providing us with full global Tel: 03 8686 8000 3 Email: [email protected] Fantastic Furniture connectivity. 3 Notting Hill – Lynton Williams Kmart Savills is expert in delivering results in Tel: 03 9947 5100 3 Corporate Express the following areas: Email: [email protected]

62 Savills Industrial teams leased over 520,000 sqm worth of property in 2009.

Our team has a vast range of skills and works together to deliver results to major institutions, developers, corporate organisations and high net worth individuals who value our impressive track record.

26-28 & 30-32 Elliott Lot 1 Bicentennial Drive, 149 Kerry Road, Road, Dandenong VIC Golden Grove, SA Archerﬁeld QLD Area: 9,015m² Area: 8.061 ha. Area: 25,000m² Sale Price: $7,150,000 Sale Price: $12,000,000 Sale Price: $18,000,000

Qld Sugar Terminal 27-29 Lakewood Boulevard 156 Colmslie Road, 28 Percival Street, Braeside VIC Murarrie QLD Smithﬁeld NSW Area: 3,000m² Area: 10.675ha Area: 18,000m² Lease: $200,000 p.a. net Sale Price: $36,000,000 Lease: $1,548,000 p.a. net

17 Scanlon Drive, 70 Darlington Drive, Interchange Park, Epping VIC Yatala QLD Eastern Creek NSW Area: 12,975m² Area: 9,371sqm Area: 25,000m2 Sale Price: $7,750,000 Lease: $997,100 p.a. net Lease: $2,625,000 p.a. net

42 Birnie Avenue, 9 Orielton Road, 45 Baile Rd, Lidcombe NSW Smeaton Grange NSW Canning Vale WA Area: 13,850m² Area: 11,300m² Area: 12,000m2 Sale Price: $11,325,000 Sale Price: $11,000,000 Sale Price: $13,100,000

With over 200 ofﬁces and associates across more than 40 countries around the globe, you can trust our expert property professionals to deliver the best results for your next project.

Sales and Leasing Project Management Logistics Solution Services Corporate Real Estate Services Valuations Facilities Management Asset Management Research

Thinking Property? Think Savills.

New South Wales 02 8215 8888 Queensland 07 3221 8355 South Australia 08 8237 5000 Victoria 03 8686 8000 Western Australia 08 9488 4111 savills.com.au STATE OF AUSTRALIAN CITIES 2010

BY THE MAJOR CITIES UNIT, INFRASTRUCTURE AUSTRALIA

While the struggles and passions of rural life are often used to deﬁne the Australian spirit, for the vast and overwhelming majority of Australians, life in the cities is the reality. Some city dwellers may yearn for a sea change or a tree change, but few of them will take such a step. For Australians, living in the nation’s major cities will be the norm both for the present and for the future.

64 Australia is one of the world’s more urbanised nations, with just that information deficiency and sets the scope and context for over three-quarters of the population living in 17 major cities of Australian Government involvement in urban policy and 100,000 people or more and the majority of urban dwellers planning, which has as its focus improved living standards for living in five cities—Sydney, Melbourne, Brisbane, Perth and the people who live in the nation’s major cities. Adelaide. The population of Australia is projected to be 35 million by mid-century, with our capital cities becoming home The economic strength of Australia’s major cities is evident. to the vast majority of this increased population. They contribute nearly 80 per cent of national Gross Domestic Product and the employment of 75 per cent of the nation’s Within the largest capitals, urban areas are growing rapidly, workforce. The major cities are also responsible for some 84 with net overseas migration seen as the main contributor to per cent of Australia’s economic growth in the period 2003 to population growth. The local government areas of Wyndham, 2008 and 81 per cent of employment growth between 2001 Melton and Whittlesea in Melbourne; Wanneroo, Swan and and 2006. There is nothing to suggest that those trends will Rockingham in Perth and Ipswich in Brisbane are among the change. fastest and largest growth areas in the nation. In 2007–08 they experienced growth rates above 4 per cent and population Stronger, more sustainable and more liveable Australian cities increases of 4,000 or more for the year. mean a stronger Australian economy and an enhanced lifestyle for all Australians. Australian urban life provides extensive economic, social and cultural benefits for residents. Large net migration and the In the economic and lifestyle context, the well-being of urban concentration of overseas-born people in the cities have communities also need to be understood to support policy created a cultural and linguistic diversity that has helped further development and delivery. define and enhance modern urban life. While Australian cities perform relatively well in terms of quality of life and other social The report found that the past outward urban expansion has issues, they are confronted by significant challenges including meant a greater distance between residential and employment population growth and demographic change, transport areas with a resultant greater use of cars, higher transport congestion, living affordability, infrastructure development, costs, more vulnerability to oil price rises and the loss of productivity growth, climate change and ecological agricultural land or habitat. More recently, however, the pattern sustainability. Australian cities will need to respond effectively to of growth has seen an increasing proportion of population these challenges in order to sustain the high quality of life growth accommodated in existing inner and middle suburban enjoyed by urban communities into the future, and remain areas, most notably in Sydney. globally competitive. The level of car dependency in Australian cities has increased at a faster rate than population growth, creating traffic congestion problems as infrastructure and public transport have failed to keep pace with population growth. CONGESTION, THE BANE OF URBAN Congestion, the bane of urban dwellers, if not addressed will DWELLERS, IF NOT ADDRESSED WILL continue to grow as a serious negative not only for lifestyle but CONTINUE TO GROW AS A SERIOUS also for the negative economic impacts. Quoting the Bureau of NEGATIVE NOT ONLY FOR LIFESTYLE Infrastructure, Transport and Regional Economics, the report BUT ALSO FOR THE NEGATIVE estimates that the avoidable cost of congestion for the ECONOMIC IMPACTS. Australian capitals was approximately $9.4 billion in 2005. Projections show that by 2020 this cost will rise to $20.4 billion, impacting adversely on Australian productivity and national, state and territory and local economies.

Overcoming the negatives and enhancing the positives to Congestion not only lengthens working hours but also tilts the improve the lifestyles of Australia’s urban residents requires work/family balance contrary to the aspirations of the majority discussion and debate, which can only be initiated on a of Australians. In addition, congestion leads to productivity national level, in national forums and with research and data declines. In Australia’s eight capitals, the freight task—the collected and presented uninhibited by local concerns and/or movement of goods—is expected to grow by 70 per cent prejudices. between 2003 and 2020 and, as trucks compete with other trafﬁc in ever more congested roads, productivity will decline Depictions and studies of individual cities—capital and/or and costs to business increase. major—are commonplace. However, a holistic study of the phenomena of Australian cities, measuring economic, Congestion and growing vehicle numbers result in air quality environmental, social and demographic changes, has never declines. Transport emissions are one of the strongest sources before been undertaken. Systematic data compilation, which of emissions growth in Australia. That growth is expected to can reveal trends and provide a platform of knowledge for the continue, with direct CO2-equivalent emissions projected to development and implementation of future urban policies, has increase 22.6 per cent between 2007 and 2020—or around been deﬁcient. 1.58 per cent a year.

The State of Australian Cities Report 2010 begins to redress Declining air quality is linked to commonly reportable health

65 conditions among children and young adults, with respiratory direction of Australia’s major cities, there is an inherent need for conditions and exposure to urban air pollution now accounting a coordinating and oversight role for the Australian for 2.3 per cent of all deaths. Government, given its primary economic, social welfare and infrastructure roles. Fitting the policies—sometimes allied, All three spheres of Australian government—national, state and sometimes conﬂicting—of state, territory and local government territory, and local—have roles to play in addressing and into a national framework can only be achieved by a national meeting the key challenges and opportunities to improve the collaborative approach. productivity, liveability and sustainability of Australia’s cities. This can only be achieved by working in partnership with In the rollout of new infrastructure, local, state and territory communities and the private sector. governments increasingly look to the Australian Government for the necessary capital to supplement their own ﬁnancial inputs. The design of urban environments can contribute to the health In meeting growing local, state and territory demands, the and wellbeing of communities by supporting active living, active Australian Government, however, must ensure that taxpayer and passive recreation opportunities, public transport and funds are allocated to deliver improved living standards and social connectivity. Evidence suggests that well-designed quality of life for all Australians, as well as the national public open space is restorative for the community, reducing economic good, rather than satisfying particular local the mental fatigue and stress of urban living. demands.

Australian cities can provide many opportunities to lead the The data and material presented in the State of Australian nation towards a more sustainable future. The way cities are Cities Report 2010, will assist the Australian Government, in planned, built and function can promote more efficient use of cooperation with state, territory and local government, and in resources, including water, energy and land, minimise the partnership with the community and industry, to improve production of waste and encourage more reuse and recycling, Australian urban policies. This will not only continue to provide reduce greenhouse gas emissions, and support biodiversity in the major cities contribution to the nation’s economy but also and around urban areas through better management of open enhance the living standards and life quality for our and green space. State and territory governments lay down communities. strategic planning frameworks, and local governments implement planning policies that ideally reflect local aspirations. A full copy of the report, State of Australian Cities 2010 is However, while the eight state or territory governments and available in PDF format from the Major Cities Unit 155 local governments will significantly influence the future website at www.infrastructureaustralia.gov.au/mcu.aspx

66 RECRUITMENT

Making careers in freight

hrough Front-Line Resources Management you receive Australia. Hundreds of our future Supervisors & Managers have targeted & strategic recruitment solutions. Forget recruitment graduated or are in the process of completing a MFC Traineeship. Tcompanies that offer candidates one day and poach from you 3 Certificate I, II, III, & IV in Transport & Distribution, part of the the next! With FRM you can be sure of your recruitment outcomes. Australian Quality Training Framework FreightQuiz is an innovative, reliable and cost effective skill 3 Qualification available in variety of streams, including assessment tool. FQ has been developed by industry specialists, no Warehousing & Storage, Road Transport , Logistics, Aviation, two tests are the same and the questions are continually reviewed Administration & Customs Brokerage, and Business and updated. 3 FMI (Front Line Management Initiative) for supervisors and Front-Line Training Solutions can deliver a cost-efficient managers. training solution, targeted exactly to your needs. From one hour or one week, FTS can deliver fast results and an outcome that will SYDNEY: MELBOURNE: ADELAIDE: BRISBANE: PERTH help to retain staff and customers. P: 1300 881 075 MY FREIGHT CAREER is well established as the means of F: 1300 882 927 attracting the best candidates. MFC has recruited and placed E: [email protected] trainees with numerous freight & logistics companies around www.myfreightcareer.com.au

67 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

KEYNOTE ADDRESS The Hon Anthony Albanese MP, Minister for Infrastructure, Transport, Regional Development and Local Government, Leader of the House, and Member for Grayndler—Wednesday, 3 March 2010

Chairman Backman, delegates. Large companies such Linfox and Toll provide a range of services for clients, whilst others, such as Australia Post, I want to begin by acknowledging the traditional owners of the undertake their own logistics. land on which we meet today and pay my respects to their elders, past and present. It is also an industry within which for every large company, there are many more mum and dad operators. I am pleased to have the opportunity to address your annual forum, which follows meetings I have had with some of your With such diversity, it is little wonder that we have so many leaders. associations representing differing industry sectors and regions, placing varying demands on government and offering The Australian transport and logistics industry is the lifeblood of competing solutions. our nation’s economic productivity. It generates up to 14.5% of Australia’s GDP and provides more than one million jobs across That is why it is particularly pleasing to be addressing the 165,000 companies. annual forum of the Australian Logistics Council—a body that is national and is cross modal. Your industry covers an extremely diverse range of operators. A forum removed from the tired policy debates of the past. A

68 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

forum that rejects the negative frame that pits one mode of creating jobs, and building the assets we need to lock in our transport against another, and is instead focussed on the long-term economic prosperity. positive frame of improving the efﬁciency and safety of freight supply chains. During recent years we developed a coherent policy that we put into place in government. Efﬁciency that is vital to the nation’s economic performance to cut the costs of business and reduce costs to consumers. We listened to industry.

Safety that places a premium on the people that work in the We listened to economists. industry and interact with it on a daily basis. We listened to the Reserve Bank and its 20 separate warnings about capacity constraints in the economy.

We listened to the frustration of Australians dealing with urban congestion, poor infrastructure and the lack of leadership to avoid dangerous climate change. THAT IS WHY IT IS PARTICULARLY Above all we listened to and acted on our gut instinct. PLEASING TO BE ADDRESSING THE ANNUAL FORUM OF THE AUSTRALIAN The instinct that tells us that we are engaged in politics to LOGISTICS COUNCIL—A BODY THAT IS make a real difference. NATIONAL AND IS CROSS MODAL. That building the capacity of the nation through infrastructure A FORUM REMOVED FROM THE TIRED has long-term beneﬁts well beyond the period of any government. POLICY DEBATES OF THE PAST. A FORUM THAT REJECTS THE NEGATIVE Our gut instinct told us that we needed to break the nexus FRAME THAT PITS ONE MODE OF between the infrastructure policy cycle and the three-year TRANSPORT AGAINST ANOTHER, AND electoral cycle. IS INSTEAD FOCUSSED ON THE Like any piece of essential infrastructure, it has been essential POSITIVE FRAME OF IMPROVING THE to get the foundations of our policy right. EFFICIENCY AND SAFETY OF FREIGHT SUPPLY CHAINS. We have formed a new Department of Infrastructure. We appointed the nation’s ﬁrst Federal Minister for Infrastructure.

We created Infrastructure Australia, with an advisory council of 12 Chaired by Sir Rod Eddington and with half of its members The Rudd Government is committed to improving Australia’s drawn from the private sector. global competitiveness to meet the challenges of the future. We have conducted an audit of Australia’s infrastructure needs Today I would like to address our productivity agenda—the and published the first assessment of nationally significant importance of infrastructure renewal and the role of regulatory projects. reform. We established three nation building funds in our first budget And in the face of the expectation that by 2056 Australia’s and made an initial allocation of $26 billion. population will reach 35.5 million, the topic that dared not Our second budget provided investment where the economic speak its name for most of this decade—urban policy. need is greatest—on those projects that were assessed as I will also briefly mention some government initiatives on smart national priorities. infrastructure and workforce planning. We set up the Building Australia Fund to support ongoing infrastructure investment, and completed our first major Public Infrastructure Private Partnerships policy, to make it easier and cheaper for The Rudd Government believes that targeted infrastructure the private sector to partner with governments. investment is fundamental to strengthening our economy, Now if imitation is the best form of flattery, then it’s clear we’ve

69 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

got the fundamentals right. National Ports Strategy In the last few months, the British Labor Government has In order to facilitate growth in trade and to improve Australia’s announced the creation of Infrastructure UK. performance in the global economy, a more national approach must be brought to the job of planning, regulating and investing It’s not just Labor Parties adopting this model. in our trade gateways, our ports and landside infrastructure.

Upon coming to ofﬁce, the New Zealand conservative Historically this task was left to state governments and the government sought advice on the Infrastructure Australia private sector. model. The Rudd Government supports a nationally consistent and Here in NSW, the opposition has adopted a core policy of the coordinated approach to the major ports so critical to our establishment of Infrastructure NSW. future.

Likewise, the Tasmanian opposition has adopted a policy to We have asked Infrastructure Australia for a national ports create Infrastructure Tasmania. strategy and a national freight network plan.

The Infrastructure Australia architecture is doing what it Last week, Infrastructure Australia consulted industry on its should—removing the temptation towards short-termism. exposure draft of the national ports strategy.

It gives business a transparent process, and promotes I understand there was some robust discussion on some key evidence-based public investment decisions. issues, such as long-term master plans for nationally signiﬁcant ports, and the right model for nationally consistent approvals Infrastructure investment for port precincts, channels and freight corridors. Together with the states and territories, we’re building the I am pleased to see serious engagement is underway on these transport infrastructure that will make our economy more and other key issues, and I look forward to receiving the end productive, our regions more prosperous, our cities less product of these consultations later this year. congested and our environment even more sustainable. Infrastructure Australia is also working on a national freight We are investing almost $36 billion over six years to modernise network plan. and maintain the nation’s road, rail and port infrastructure.

The federal roads budget is now $27.7 billion over six years— Maritime reform more than twice what the previous government spent over a A key area of the transport sector that has been neglected in similar period of time. the recent past is the maritime industry.

The rail budget is now $7.9 billion over six years for 38 major Each year, almost 4,000 ships transport goods to and from freight and passenger rail projects. Australia, carrying 99 per cent of imports and exports by volume. This constitutes the world’s fifth largest shipping task. We are investing more in rail over the next 12 months than our predecessors did during their 12 years in office. Future economic growth and quality of life is tied to safe and efficient shipping. With the relatively dispersed number of major We are the first national government to invest significantly in ports and population centres around our large coastline, urban passenger rail infrastructure. shipping’s lower carbon footprint offers unrealised opportunities. It needs to be considered within our overall And we’ve set aside funds for port infrastructure. transport strategy. On top of this, the states and territories have agreed to That is why we are working hard on three aspects of maritime contribute more than $6 billion of their own money to the reform: a single national regulator for all commercial vessels; national network. the rewrite of the Navigation Act 1912 to modernise it to reflect Our unprecedented investment will lower transport costs, contemporary conditions and practices; and consideration of tackle the rising cost of urban congestion, cut travel times, reforms to revitalise Australian shipping. curb carbon emissions and save lives. Regulatory reform This year alone, construction work will commence on major road and rail projects worth more than $20 billion. Delivering safe, efficient and productive transport arrangements is not just about investment. It’s about improving productivity

70 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

through regulatory reform, creating a seamless national All three national regulators will be fully operational by 2013. economy, and reducing costs and red tape.

The need for regulatory reform is critical. We understand that Cities and planning different approaches to regulation between states and It is common sense that any consideration of improving the territories add a considerable burden for operators who cross performance of freight supply chains needs to grapple with the state borders. nature of our cities and urban congestion.

The ALC study, ‘The cost impact of regulation disparity in cross This is even more important when considered in the context of border regions’, recounted the example of the transport of hay population projections over the next 30 years forecast in the bales. Intergenerational Report 2010.

The standardised nature of hay bale production means that Prime Minister Kevin Rudd, in his address to the Business when stacked two wide and three high on a vehicle, they Council in October last year, said: exceed load width and height limits in some jurisdictions but not others. “Capital city strategic plans are needed to lift economic productivity, respond to climate change and ensure the nation The problem caused by differing approaches to regulation was is geared up for 35 million people by 2049.” ﬁrst recognised when Bob Hawke established the National Road Transport Commission in 1991 with the aim of creating The number of people living in cities is projected to increase uniform or consistent road transport legislation throughout from 13 million to 23 million. Australia. Brisbane and Perth’s populations will grow by 120 per cent. Sydney and Melbourne will each have 7 million people.

AUSTRALIA NEEDS A POLICY The quality of life in our cities is an issue we as a nation have FRAMEWORK THAT WILL ASSIST THE confronted before. COMMONWEALTH, THE STATES AND In the 1970s, issues including the lack of sewerage TERRITORIES AND LOCAL infrastructure in the outer suburbs were tackled by the GOVERNMENTS TO CREATE Commonwealth, and the quality of urban life improved. PRODUCTIVE, LIVEABLE AND In the 1990s the regeneration of inner cities was enhanced SUSTAINABLE CITIES. under the Better Cities Program.

Now we must confront the challenge of ensuring we develop sustainable cities for the future. Much progress has been made since then. But while all Australian jurisdictions recognised the importance of regulatory Australia needs a policy framework that will assist the harmonisation, the pace of reform needs to be lifted to meet Commonwealth, the states and territories and local the challenges that lie ahead. governments to create productive, liveable and sustainable cities. That’s why in July last year COAG agreed to implement national regulators for maritime safety, rail safety and heavy In 2008 we created the Major Cities Unit. vehicles. In December 2009 COAG agreed to national criteria for capital The expanded national maritime safety regulation will continue strategic planning systems to ensure cities have strong, to be hosted by the Australian Maritime Safety Authority. transparent and long-term plans in place to manage population and economic growth and address future challenges. South Australia will host the national rail safety regulator, and Queensland will host the national heavy vehicle regulator. These plans and the agreed criteria will be linked to future Commonwealth infrastructure funding decisions. I stress that these will be national regulators, not the current state regulators with an expanded role. Work is proceeding between jurisdictions on improving Australia’s urban congestion management, tools and This will mean improved safety and improved efﬁciency for performance information. industry. The Australian Government is providing $50,000 to the ALC for

71 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

its Future Supply Chain project, which will facilitate a national reduce congestion, make infrastructure greener, and improve industry policy position on future supply chain sustainability safety. relating to energy and environment matters. Workforce planning and skills Smart infrastructure A further industry reform area being facilitated in partnership by One of the real opportunities to make our transport systems governments concerns national workforce planning and skills. safer and more reliable, and our lives less stressful, is to make For too long the human capital aspects of the productivity our infrastructure smarter. agenda have been ignored by government.

The Federal Government’s $43 billion commitment to establish The industry faces critical workforce issues—an ageing, male the national broadband network will support the future dominated workforce with emerging shortages in critical skilled economic growth of the Australian economy and open occupations. signiﬁcant opportunities for government and business to invest in smart infrastructure. The ATC has endorsed a strategic action plan to encourage stronger collaboration between all levels of government and There are a number of other initiatives underway supporting the industry and to help address workforce planning and skills application of smart infrastructure. needs in the transport and logistics industry.

We have invested in the Australian Rail Track Corporation’s The Government has agreed to provide $120,000 to support Automatic Train Management System trial. the expansion of the ‘Women Moving Forward’ mentoring program, which provides a mentorship-based personal and professional development program for 200 places nationally to improve career development opportunities for women in the transport and logistics industry. THE FEDERAL GOVERNMENT’S $43 BILLION COMMITMENT TO ESTABLISH Conclusion THE NATIONAL BROADBAND NETWORK As the world emerges from the global ﬁnancial crisis, the WILL SUPPORT THE FUTURE government’s reforms will position Australian industry to ECONOMIC GROWTH OF THE increase its competitiveness internationally. AUSTRALIAN ECONOMY AND OPEN SIGNIFICANT OPPORTUNITIES FOR The contribution that transport and logistics can play in that process will be strongly inﬂuenced by the level of partnership GOVERNMENT AND BUSINESS TO and cooperation that you, as industry members, can achieve INVEST IN SMART INFRASTRUCTURE. both amongst yourselves and with government.

It is important that the ALC provides strong leadership within the transport and logistics industry to work with government.

In doing so, you will be contributing to a sustainable and We are also committing tens of millions to a range of smart productive future for our nation. infrastructure projects such as the Kwinana Freeway Freight Management system in Western Australia and the Advanced Trafﬁc Management System in South Australia.

Building on these initiatives, the House of Representatives Infrastructure Committee has agreed to my request to enquire into smart infrastructure and make recommendations on ways to maximise its potential beneﬁts to all Australians.

This inquiry is looking at the role that smart infrastructure can play in the transport, communications, energy and water sectors.

I am looking forward to receiving advice on the ways smart infrastructure can lift productivity, enhance service delivery,

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73 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

LET’S NOT REINVENT THE WHEEL, BUT LEARN FROM OTHERS By Helen Newell, Director, Strategy and External Relations, Asciano Limited

Australia’s freight industry is often described as one of the most » economies and scale and scope: with Australia’s disperse heavily regulated or over-regulated freight industries in the population and relatively small market size, economies of world, and of any industry in Australia. scale and scope have been critical to survival of major players, especially those that compete globally and not just Regulation is one of the four levers government can pull or use within the Australian market; to provide a framework for an effective market. The other three » innovation and increased use of technology: truck design in are land use planning, pricing mechanisms and investment. particular has seen considerable innovation and Historically, freight regulation in Australia has been established advancement over the last 20 years, increasing capacity on three parameters: and efficiency; » increased recognition of social costs caused by business » mode—i.e. road, rail, sea, air activity, and attempts to internalise those costs, ensuring » geography—states and federal those that cause the social cost carry a greater burden in » purpose—safety, economic, environmental, competition. paying for the remediation or mitigation of those social costs; While all seem justifiable in their own right, especially to the » greater recognition of industry participants on the collective individual minister, bureaucrat or agency seeking to introduce benefits of standardisation, which has resulted in the it, it has resulted in a proliferation over time of endless establishment of such self-regulating tools as the Rail Rule regulations that instead of providing a framework or set of rules Book, the RSSB standards, and the Trucking Codes; that enhance market effectiveness and productivity, strangle it, » and, most importantly, the change in thinking within or worse in certain cases, drive outcomes, often not organisations from functional silos to supply and value anticipated, that then require further regulatory intervention to chains, that often straddle nations, state borders, transport ‘fix’. modes and manufacturing. As a national port and freight rail operator, this is the world, the set of rules in which we operate.

But we are certainly not alone, either as an industry or a nation. Most jurisdictions and countries have travelled this path. Other industries in Australia have similarly followed this course. So REGULATION IS ONE OF THE FOUR how can we learn from their journeys and fast track the reform LEVERS GOVERNMENT CAN PULL OR process we now accept that we have to undertake? USE TO PROVIDE A FRAMEWORK FOR Other jurisdictions have recognised the importance of AN EFFECTIVE MARKET. regulation that reﬂects the changing market place.

I think it is valuable to quickly reﬂect on the key changes in the freight market in Australia. They include:

» globalisation: there is now much greater movement of In Australia, there has been recognition in the last few years goods, both in raw and ﬁnished form, globally, than at any that the regulatory framework needs to be changed and time in history; simpliﬁed to better encourage/support and guide the new » consolidation of players: there are higher levels of market dynamics. concentration in most sectors in Australia, with a typical market model now of two major players and a small In Australia, progress has been made, mostly in other sectors, number of niche players; to harmonise or reduce regulation and align them more

74 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

effectively with other levers of government to achieve broader and ports as well as simply the multiple transport modes that policy goals. link those nodes. Such a model would enable broader implications of regulatory decisions, facilitate information ﬂow, But the majority of reform to date within the transport sector establish competitive neutrality between modes, and reduce has been within one mode and within one purpose. Further, monitoring costs. those introduced with national jurisdiction have failed or slowed in implementation through the COAG process. If it is accepted that more freight on rail on shorter corridors would deliver on safety, environmental and congestion Let’s look at some OECD countries and their economic objectives, then why is rail not part of the discussion when regulation models. considering where the B-triple routes should be established and what mass-distance-location charge those B-triples should Germany is probably the most broad in its economic pay for the social cost as well as actual costs associated with regulation, with one entity primarily responsible for economic those increased movements? regulation of all main infrastructure industries. Sweden, Holland and Canada all have a transport sector economic regulator. The US has the Surface Transportation Board. The STB serves as both an adjudicatory and a regulatory body. The agency has jurisdiction over:

» railroad rate and service issues; THERE HAS BEEN A MOVEMENT AWAY » rail restructuring transactions including mergers, line sales, FROM MINISTERIAL POWERS IN line construction, and line abandonments; FAVOUR OF INDEPENDENT » certain trucking company, moving van, and non-contiguous REGULATORS. ocean shipping company rate matters; and » rates and services of certain pipelines not regulated by the Federal Energy Regulatory Commission.

The ACCC has a broad economic regulatory role in Australia however it has limited jurisdiction and thus national operators, Absolutely, B-triples can demonstrate environmental, safety such as Pacific National, are required to comply with both state and efficiency benefits over B-doubles or smaller trucks, but a and federal regimes. In rail, that means six economic train on a separate alignment may be an even better outcome regulators. In ports, it also means six state-based regulators on those measures in many cases, especially if we can plus onerous legislation such as the Maritime Amendment Act introduce true competitive neutrality on infrastructure access. recently introduced in NSW giving the Ports Minister almost Those conversations and considerations are often not had due unfettered power to set operational and pricing levels on to the limited jurisdictions and scope of the parties charged stevedores. These direct interventions into one element of a with the task. supply chain can drive distortions and inefficiencies along the chain that are a multiple of the perceived gain from that initial Thirdly, from the OECD models, we can see there is a intervention, and a huge step backwards. movement towards establishing efficient processes for tackling access and dispute resolution, and again we have seen some So what can we learn from these other transport models in progress in this area in Australia, particularly in rail. other jurisdictions? We can also learn from our own energy reforms here in Firstly, there has been a movement away from ministerial Australia. powers in favour of independent regulators. We have seen this in rail in Australia, albeit we still have too many independent Similar to transport, the introduction of the NCP led to the regulators using different regimes within narrow jurisdictions establishment of mostly state-based entities in the gas and and heavy political influence. electricity sectors, supported by two national industry-specific regimes—one for gas and one for electricity—overseen by And we are certainly concerned about the trend in container jurisdictional regulators. The National Electricity Code and ports, which currently appears to be heading in the opposite National Gas Codes were drafted in quite prescriptive manners direction. to set out the framework for access arrangements to be developed between access seekers and the infrastructure Secondly, there has been a movement towards transport provider. sector economic regulators, rather than mode specific, which would incorporate nodes in the supply chain such as terminals To provide the legislative support for these two codes, the

75 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

National Electricity Law and National Gas Law were developed by infrastructure owners or state based agencies, introducing and enacted—in each state jurisdiction. Transmission ‘work arounds’ to the national model or adding new layers that regulation was accorded to the ACCC nationally while state- counter the benefits that will be achieved under the national based jurisdictional regulators were responsible for distribution model. and retail regulation. And should we move straight to a National Transport Safety Sound familiar? Regulator? One of the major issues for safety in the transport sector is when the rail and road industries collide, literally. A set So while NCP reforms drove considerable economic benefits to of rules and enforcement thereof that clearly has coverage in the country and consumers, it created complexity and cost for that most unfortunate, and too frequent, occurrence must be players in the sector. So ten years ago in 2000, COAG said, considered. At a minimum, at establishment the two must be ‘enough’, and began the review of another phase of reform. As closely aligned and complementary recognising the interaction a result of that review, and much negotiation with states, the between the two modes; for almost every train movement in energy sector now enjoys relative simplicity and a model that the non-bulk sector, there is a road movement, and too many most players in the sector say works, and I think almost all major rail incidents are as a result of the actions of a truck would say works better than the previous model. driver. There are now two entities: Environmental regulation The AEMC—the Australian Energy Market Commission—is the When we look at environmental regulation, we only have to rule-making body, responsible for the rules used for regulation look at the proliferation of environmental regulations already in of both gas and electricity. This entity, separate from the place, and growing annually, to see that reform is desperately regulator of the rules, provides certainty and stability to the needed. It is often quoted but worth repeating that there are rules nationally whilst maintaining the flexibility for the rules to currently 151 pieces of legislation and 56 pieces of quasi- evolve as circumstances change. legislation across nine jurisdictions relating to the rail industry in The AER—the Australian Energy Regulator—is the national Australia. This regulatory burden creates complexity and cost, energy market regulator. Its role is to apply the rules developed and often confusion when they contradict each other. It stifles by the AEMC. innovation and competition as too often opportunities fall into the ‘too hard’ basket before they ever get off the ground. There will be some quick to tell me why this is not a valid comparison but there are clear lessons we can learn at the We have not even started tackling this one. macro level. This model provides simplicity, clarity, flexibility, equity, and an industry focus. All lessons we can and must adopt for transport regulatory reform.

We must start to look at economic regulation consistently across state boundaries and across modes. IN AUSTRALIA, TO DRIVE A TRAIN ACROSS AUSTRALIA FROM PERTH TO Safety regulation BRISBANE, A NATIONAL RAIL OPERATOR MUST COMPLY WITH NINE When we look at safety regulation and which models work, the obvious comparison is between Australia and Europe. In SAFETY REGULATORY REGIMES. Australia, to drive a train across Australia from Perth to Brisbane, a national rail operator must comply with nine safety regulatory regimes. In Europe, that train can travel across more than 23 countries within one rail safety regime. Again, in the US, a population of 250 million is protected by one rail safety The purpose of regulation is to provide a framework within regime, while we have three times as many safety regimes as which market forces operate to achieve the outcomes in the national rail operators. best interests of the nation and its people.

As the minister and others today have said, we are moving to There are key lessons we can learn from other jurisdictions and national safety regulators in Australia for the heavy road industry sectors: vehicles, rail and maritime safety sectors. They must be implemented sooner than July 2013, and they must utilise the » start broad—what are we trying to achieve at a macro hard work already done, such as the much-debated National level? Rail Safety Bill. These national agencies must not allow gaming » recognise the freight ﬂows, not the lines on the map;

76 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

» understand the competitive opportunities—road versus rail framework across: versus sea—and foster them through competitive neutrality; » all modes and nodes of freight transport; » keep it simple; » all state boundaries; » provide certainty and ﬂexibility to industry participants to encourage investment and innovation. » all areas of regulation within a reasonable time frame.

The regulatory framework must be established holistically, with all objectives in mind, as well as the application of the other government levers such as investment and pricing. While this is much harder to do, because it requires the engagement of multiple stakeholders, it will result in a much more effective framework for the long-term. SO WHAT IS ‘SAFE’ IN ONE STATE IS NOT ‘SAFE’ WHEN YOU CROSS AN There are natural tensions between regulations of these various INVISIBLE LINE ON A MAP. areas that must be recognised in their formation.

Clearly, our safety record will be at its highest and our emissions at their lowest if we move less freight—fewer trucks and fewer trains.

However, that is clearly not practical in a country where the Not one rule, not the lowest common denominator, but one set freight task is growing well ahead of GDP. So motivating and of rules that support and complement each other. rewarding safety regulators to introduce more and more regulations that aim to improve safety objectives but reduce While perhaps a naively aspirational goal in some people’s economic and supply chain productivity has ramifications. eyes, others have done it. Why can’t we? I think most in the While safety is and must always be paramount, we must work transport industry are ready to work with the relevant agencies to find ways to increase safety within a framework that to take the bold steps required. recognises the impacts on other policy objectives. We can inch forward, tiptoe through the politics and be We have seen numerous examples of this, further exacerbated dragged back by the poor decisions of the past, or we can when this new regulation is only introduced in one state, often take on the challenge now, to set us up for the future. The as the result of an indirectly related incident that attracted freight task is growing too quickly for the current model, or much political attention, such as Waterfall in NSW. So what is even incremental improvements to it, to cope with. Let’s build ‘safe’ in one state is not ‘safe’ when you cross an invisible line on the momentum and leadership the Federal Government has on a map. provided. Let’s harness the enthusiasm of the ALC and others. We really have no choice but to get this right now. And the people who have responsibility for driving economic efficiency and equity are not even involved in the determination of those new safety regulations.

With complete separation of both rule setting and enforcement of those rules, this is not only not surprising, but also inevitable.

Once established holistically, with national supply chain focus and broader policy recognition, the enforcement of the regulations can and should be managed by those with expertise to ensure it is being both effective (i.e. delivering the outcomes outlined in the overall framework) and efﬁcient (i.e. lean for both compliance for companies and monitoring by agencies).

With the development of the National Freight Network Plan and National Ports Strategies underway, we have a unique opportunity and an excellent forum and mechanism for Australia to leapfrog our OECD peers, learn from other sectors in Australia, and set a target of a national, holistic, regulatory

77 SEA/AIR CARRIAGE United Nations Security Council Sanctions – risks for Australian Freight Forwarders BY TOM IRVING – TT CLUB

Australian freight forwarders face potential penalties in excess of AUD 1,000,000 if they breach United Nations Security Council Sanctions (“UN Sanctions”). These penalties relate to the trade of certain goods to countries against which Australia is obliged to impose these sanctions.

he objective of the UN Sanctions is “to apply pressure on a transaction value (if this can be determined). For a body corporate State or entity to comply with the objectives set by the the offence is one of strict liability (meaning that it will not be T Security Council without resorting to the use of force”1. necessary to prove that the company intended to commit the Australian freight forwarders may be caught if they issue a house offence). However, the company will have a defence if it can prove bill of lading in respect of sanctions-designated goods for export to that it took reasonable precautions and exercised due diligence to one of the specified countries. Importantly, the prohibitions apply avoid committing an offence. whether the immediate or final destination is one of these Whether a company has taken precautions and exercised due countries, which may be difficult to determine prior to export. diligence will likely depend on the particular circumstances, with Amongst the measures imposed are prohibitions on the export regard to inquiries a reasonable person would have made based on (without appropriate permits) of “paramilitary equipment’ to Sierra information contained in, for example, a Shipper’s Letter of Leone, “arms or related matériel” to countries including Instruction. A company will likely need to show that it made proper Afghanistan, Liberia, the Democratic Republic of the Congo, inquiries of their customers to determine whether the transaction Sudan, Cote d’Ivoire, Lebanon, Eritrea and North Korea and involved goods that are the subject of sanctions, or transport to, “luxury goods” (which include items such as wine, tobacco, from or through a sanctions-affected country. In circumstances perfumes and sports equipment) to North Korea. The sanctions where permits have been granted, companies may also need to also apply to certain imports, including prohibitions on the transfer establish that they took precautions to verify the legitimacy of the of Iraqi cultural property. permit, and to confirm that the nature and destination of the Whilst the obvious target in terms of imposing penalties for the goods comply with the terms of the permit. breach of the Act would likely be the suppliers/exporters, the With any penalty regime, good knowledge of your customers legislation is drafted widely enough that the forwarder could also and their activities should reduce the likelihood of a breach face a substantial fine. For a body corporate, the current penalty is occurring. a fine which is the greater of AUD 1,100,000 or three times the 1 (http://www.un.org/sc/committees/).

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transport insurance plus innovation DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

NATIONAL PARTNERSHIP AGREEMENT TO DELIVER A SEAMLESS NATIONAL ECONOMY: REPORT ON PERFORMANCE 2008-09 By Paul McClintock AO, Chairman, COAG Reform Council

At the ALC Annual Forum, ‘Driving a Seamless Supply Chain’ National Economy is designed to contribute to the following in Sydney this year, Paul McClintock, AO Chairman of the outcomes: COAG Reform Council noted the importance of the logistics industry and supply chain to the nation and acknowledged that » to create a seamless national economy, and reduce government struggles to develop and implement well- costs incurred by business in complying with coordinated policy to assist and strengthen this industry. unnecessary and inconsistent regulation across jurisdictions; In his address to conference delegates, Mr McClintock outlined » to enhance Australia’s longer-term growth, improving the program of reform and harmonisation driven by the Council workforce participation and overall labour mobility; and of Australian Governments. » to expand Australia’s productive capacity over the “The national partnership I am focused on in these remarks is, medium-term through competition reform, to enable of course, only a part of a much larger framework now stronger economic growth. governing Commonwealth and state financial arrangements. I “Our role in reporting to COAG—and reporting publicly—on the believe the governments of Australia, and particularly the performance of the nine governments is important to driving Federal Government, deserve credit for the boldness of this ongoing reform.” new system, which transforms the federal system.” Mr McClintock referred to former Prime Minister Kevin Rudd’s “Our report on the seamless economy was the first goal of increasing annual productivity growth to the two per independent evaluation of whether milestones in this far- cent per year levels achieved in the 1990s, highlighting that reaching national partnership have been achieved in this critical Australia has reaped the benefits of the high productivity part of COAG’s reform agenda aimed at driving productivity growth that flowed from the microeconomic reforms in the growth. Transport and infrastructure reform is a key part of the 1980s and 1990s. seamless national economy agreement and all nine governments have committed to transport and infrastructure reforms to boost the long-term productivity of Australia’s economy through effective regulation of our road, rail and sea transport systems; improved access to Australia’s infrastructure facilities; and harmonising the safety regulation of our transport networks. “IT IS RATHER SIGNIFICANT THAT ALL GOVERNMENTS HAVE AGREED TO THE “In the report, the council has expressed concern to COAG COUNCIL’S RECOMMENDATIONS OUT that there appears to be a significant loss of momentum in the OF SESSION AND IN FULL!” key competition reform areas of infrastructure and transport. The council made a recommendation for COAG to reinvigorate this agenda, and I am pleased that COAG has accepted this recommendation—and indeed all four of our recommendations—very swiftly.

“It is rather signiﬁcant that all governments have agreed to the “The Organisation for Economic Cooperation and Development council’s recommendations out of session and in full!” has reported that regulatory reform has contributed signiﬁcantly to Australia’s economic success, noting that the product Mr McClintock went on to outline the agreement and market liberalisation conducted under the National Competition background information on the report. Policy framework reduced barriers to entry, increased competition and contributed to an impressive surge in “The National Partnership Agreement to Deliver a Seamless productivity.

80 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

“Governments took some important lessons from this heyday The report of reform, including the value of incentive payments to drive reforms (just as they did for the National Competition Policy), The report released on 23 February 2010 assessed the and the importance of having a broad reform agenda to use performance of governments against 2008-09 milestones for the general benefits of overall productivity and economic the 36 areas of reform. The 36 areas of reform to be achieved growth to offset the costs borne by specific sectors.” in the five years of the National Partnership include:

Mr McClintock said these lessons are the reason why there is a » 27 deregulation priorities [as listed in Figure 1]; COAG Reform Council. » eight competition reforms; » and the 36th stream comprises ongoing efforts to “There is a broad reform agenda contained within the national reform processes for the making and review of partnership, and there are reward payments in the later years regulation. that are tied to the achievement of a signiﬁcant set of reforms. The report captures progress against the 2008–09 milestones “Reward payments are not linked to the achievement of the up to a reporting cut-off date of 30 September 2009. competition reforms, however, of which the transport and infrastructure streams are a part. For that reason it is important The following are some recent reform developments where for interested stakeholders to carefully follow the rate of these are relevant to understanding our progress assessment progress in this work and to encourage governments to deliver as at 30 September last year. on reform. I also note that the Business Council of Australia has identiﬁed this as an issue, and has suggested that governments should consider linking new reward payments to the competition reforms.”

He said the Productivity Commission highlighted the beneﬁts of reform in its 2007 report on the Potential Beneﬁts of the then National Reform Agenda.

“The commission estimated that competition and regulatory reform could increase GDP by two per cent, raise household income by more than $400 per person, and raise the funds available to governments by about $5 billion.

“Since then, the global economic downturn has only emphasised the importance of ongoing reform.”

Mr McClintock said Australia’s recent recovery from the downturn, combined with the longer-term challenges we face, such as estimated reductions in workforce participation and increasing pressure on infrastructure, should ensure that our governments remain focussed on this important agenda.

“Going back to what I said about the importance of a broad reform agenda, it is important to see the Seamless National Economy Agreement as a package of reforms, not individual reform streams.

“While delay in achieving some milestones or in some reforms now may seem insigniﬁcant to some, if this delay continues—or Figure 1: Overall Assessment – deregulation priorities worse, if it builds across multiple reforms—problems will arise in achieving reforms in the ﬁve year life of the Seamless Assessment schema National Economy Agreement. Mr McClintock told the delegates that the progress of milestones was measured against completeness, timeliness “So in essence, our recent report is a valuable early warning for and impact on the ability of governments to meet future COAG where we believe political focus needs to be stepped milestones—and the ultimate reform. up—in some cases because certain reforms are struggling,” Mr McClintock said. He outlined the use of tables as a visual representation of the

81 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

council’s assessment for progress against individual regulatory impact statement that informed this decision was milestones. not made public during the reporting period. It was consequently unclear whether key matters, such as financial The tables use a green-amber-red representation, with green implications and legislative timing, were addressed.” indicating that a milestone has been completed on time, red indicating a milestone has not been completed, and amber Mr McClintock said that notwithstanding these concerns, indicating areas where the reform is late with a good chance it further progress has been made since 30 September and there can be completed. remains scope for an intergovernmental agreement to be signed in 2010. “We hope that this will be a late finisher, but Findings – deregulation priorities will get over the line—it looks better now than six months ago. But I would recommend keeping an eye on it.” “Overall, the council found that governments have made good or satisfactory progress against milestones for 18 of the 27 The good news deregulation priorities,” said Mr McClintock, highlighting the assessments presented in Figure 1. Mr McClintock said there is considerable good news on the deregulation priorities, with 2008-09 milestones being met He also pointed out that there are significant risks to future across a number of major reforms. milestones for five of the 27 deregulation priorities (indicated in red) and five reform streams where there has been some “There has been good progress on occupational health and slippage (those rated amber). safety reforms. This is a keynote reform under the National Partnership, of considerable interest to business and industry. “Based on both our progress assessment and risk assessment, we’ve recommended to COAG that there are “There is also good progress across the range of consumer seven deregulation priorities that require COAG’s closest and small business reforms, including the development of the attention, as listed here: environmental assessment; national consumer law and product safety system, and the development assessment; construction code; chemicals and consumer credit regulation reforms.” plastics; food regulation; maritime safety and director’s liability.” He also noted that a number of reform streams, aimed at harmonising registration and licensing arrangements for Maritime safety occupations and businesses, remain on track. Mr McClintock told delegates that maritime safety is about improving safety and reducing the costs and burden of Findings – competition reforms maritime safety regulation through the establishment of a national regulator for all commercial vessels.

“There have been several attempts at harmonisation of maritime safety regulation over the years. On 26 March 2008, COAG agreed to the 27 deregulation priorities including maritime safety, and asked the Australian Transport Council to consider and report back on implementation of a single national approach to maritime safety regulation for commercial vessels.

“The key milestone for this reform was for all jurisdictions—via the Australian Transport Council—to report to COAG on the outcome of a regulatory impact statement process and a proposed way forward, addressing ﬁnancial implications and Figure 2: Overall Assessment – competition reforms timing for legislation.” Mr McClintock said this was intended as an interim milestone toward the signing of an intergovernmental Mr McClintock moved on to competition reforms, highlighting agreement by early 2010. their particular relevant to transport and infrastructure stakeholders (Figure 2). “We assessed this milestone as partially completed on the basis that, while COAG agreed on 2 July 2009 that the “Unfortunately, progress here has not been as positive. You can Australian Maritime Safety Authority will become the sole see from the assessment table that we found that governments regulator of commercial vessels in Australian waters, the made good or satisfactory progress against milestones for only Australian Transport Council’s report to COAG and the four of the eight competition reforms.”

82 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

He said governments failed to meet milestones, or there are existing work on urban congestion. significant risks to future milestones, for the other four competition reforms. “The single, somewhat unambitious 2008-09 milestone for this reform—for milestones to be developed—was not completed “While the road reform plan is rated red, because the single as at 30 September 2009. milestone was not met, our report also found that there was a good chance that this reform stream could be brought back on “The council found that the lack of an agreed national transport track relatively easily.” policy puts the achievement of wide-ranging transport reforms at risk.” Mr McClintock told delegates that the main problem areas are infrastructure and transport policy, and said that these reforms Road reform plan are more complicated. Mr McClintock said the continued implementation of a three- Infrastructure and transport phase road reform plan designed to improve price signals for road freight infrastructure providers will better position Australia Mr McClintock said that council has expressed concern to to meet forecast growth in the national freight task. COAG that there appears to be a significant loss of momentum in these key competition reform areas of infrastructure and “In the long-term, the reform can be expected to deliver transport. economic benefits by improving the efficiency of road use for freight purposes. “To start with we found that there was a lack of specificity in the outputs and milestones in the implementation plan agreed Mr McClintock said Phase I is largely complete, and involved by COAG for these key competition reform areas. two key elements:

“The infrastructure reforms comprise ongoing implementation » a new heavy vehicle charging regime to deliver full cost of the 2006 Competition and Infrastructure Reform Agreement. recovery, remove cross subsidies between heavy There has also been limited progress toward the certiﬁcation of vehicle classes and improve the annual adjustment state and territory access regimes. More will be said on this in process for the charges in order to maintain their the council’s next report on the National Partnership.” relationship with road infrastructure costs; and » a number of research projects on ‘externalities’ and Ports road vehicle use and costs, community service obligations and ‘incremental pricing’ for higher mass Mr McClintock said that COAG has this year looked at reforms and other innovative vehicles. to the regulation of ports.

“The key 2008–09 milestone was for jurisdictions to implement recommendations from their reviews of signiﬁcant ports by early 2009. There has been variable progress on the “IN THE LONG-TERM, THE REFORM implementation of port regulation reforms, with Western Australia’s review not released by 30 September and CAN BE EXPECTED TO DELIVER Queensland’s review not clearly in line with COAG’s principles. ECONOMIC BENEFITS BY IMPROVING Western Australia’s review has since been released.” THE EFFICIENCY OF ROAD USE FOR FREIGHT PURPOSES.” However, Mr McClintock said there has been good progress in Victoria and South Australia and implementation of reforms is underway in New South Wales and the Northern Territory.

“The council found that milestones for this reform are unclear Phase II is to be implemented in 2009-10 and involves further and the implementation plan does not include all the research and examination of the policy issues: commitments made by governments under the Competition and Infrastructure Reform Agreement.” » options for incremental pricing in the context of any overall pricing work under the road reform plan; Transport » more closely aligning road freight revenue to investment Mr McClintock outlined the four output areas dealt with by the in roads; transport policy reform stream: uniform regulation of rail safety, » an ongoing review of regulations relating to heavy heavy vehicles and maritime safety; and the acceleration of vehicle pricing.

83 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

“Phase III covers 2011-14 and builds on the previous phases, controls to a focus on results. also including a feasibility study of a ‘mass-distance-location’ based charging system for road use. “We are pleased that governments are taking our ﬁndings and recommendations seriously, and we are also pleased that the “The single milestone under the National Partnership for this media and interested stakeholders are picking up our report reform was for milestones to be developed for the second and focusing public attention on the reforms. It is critical that phase of the road reform plan. As at 30 September 2009, governments respond positively to our reports and take their COAG had agreed to start the next phase of the road reform accountability to COAG and the community seriously. plan but had not agreed on milestones or a work program.” “On the strength of COAG’s response to our report, I expect Mr McClintock added that the overall progress assessment is that we will see some further progress on these reforms at the ‘red’ because the council’s assessment is based on events that next COAG meeting.” occurred up to 30 September 2009. However, some progress has been made since 30 September.

“On 7 December 2009, COAG agreed to a detailed work plan for Phase II of the COAG road reform plan leading to the “THE NEW FEDERAL FINANCIAL completion of a feasibility study for alternative models of road FRAMEWORK—AND THE COAG pricing and funding by December 2011. REFORM COUNCIL’S ACCOUNTABILITY ROLE WITHIN “So, overall we’ve made a particular recommendation that THAT—IS AN OPPORTUNITY FOR ALL COAG needs to reassess its agenda in the areas of infrastructure and transport, with a view to reinvigorating its OF US TO DRIVE INNOVATION AND competition reform agenda and establishing a more coherent REFORM. set of outputs and milestones in the implementation plan.”

Recommendations Mr McClintock added that the second report on the Seamless Mr McClintock told delegates that four recommendations were National Economy, covering the milestones to be achieved in made to COAG, all of which have been accepted. 2009–10, will be released in just under 12 months.

“We asked COAG to note our progress and risk assessment “COAG agreed (on 7 December 2009) to the Capital Cities ﬁndings and to consider any necessary steps to improve taskforce recommendations and established a series of new performance, particularly in the seven deregulation priorities commonwealth/state arrangements to reform Australia’s capital and four competition reform areas. We made particular cities strategic planning systems. recommendations about energy, and transport and infrastructure. “The objective is to ensure that Australian cities are globally competitive, productive, sustainable, liveable and socially “We also made an important recommendation about some inclusive and are well placed to meet future challenges and improvements that could be made to the implementation plan. growth.”

“The implementation plan is an important tool for COAG to The council has been asked to provide COAG with drive governments to deliver on these reforms. It needs to be assessments during 2010 and 2011. clear about what COAG wants to achieve and set out the interim steps to those achievements. We’ve seen some early “Together with our reports on the other national agreements, steps from governments on doing this, particularly in regard to it’s a busy year ahead, but we look forward to continuing our the 27 deregulation priorities. We hope that effort is soon work assessing the performance of governments in achieving extended to the eight competition reforms and the processes milestones under COAG’s reform agenda, and making the for making and reviewing regulation.” results public.

Conclusions “The council ﬁrmly believes that by increasing the transparency and accountability of the system, and by building political and “The new federal ﬁnancial framework—and the COAG Reform community interest in the results, we will ultimately drive better Council’s accountability role within that—is an opportunity for performance from all governments.” all of us to drive innovation and reform. Through this system, COAG aims to see a steady shift in culture from a focus on

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85 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

THE NEXT BIG THING IN TRANSPORT By Nick Dimopoulos, Chief Executive of the National Transport Commission address to the 2010 ALC Annual Forum.

At the ALC Annual Forum, ‘Driving a Seamless Supply Chain’ increase from around 22 million today to 36 million in 2050, in Sydney this year, Nick Dimopoulos, Chief Executive of the highlighting that the majority of this growth will happen in major National Transport Commission congratulated the Australian capital cities. Logistics Council on its contribution to the national debate on transport and logistics. “Urban congestion affects the ability of Australians to live and work in cities and hampers the efﬁcient movement of freight In his address to the delegates, Mr Dimopoulos highlighted the and people and, hence, productivity.” importance of transport to the productivity debate, outlined a long-term vision for the transport industry, and demonstrated “Congestion is already a $12 billion deadweight loss to the how a number of current reforms will give effect and underpin economy, and a problem that is expected to double and even the long-term vision. triple over the next 10 years if nothing is done.

“Australia is facing economic and social challenges that will “This is time lost delivering goods to shops or in and out of affect the prosperity of our nation,” said Mr Dimopoulos. ports, and time spent coming to and from work sitting in traffic “Improving productivity will be the key problem for us to solve gridlock or waiting on train platforms. As little as 14 per cent of as a nation.” Australians use public transport—that means lots of cars on roads.” He went on to highlight that two thirds of our nation’s gross domestic product is generated by productivity. With 65 per cent of GDP coming from our nation’s capital cities, and 88 per cent of Australians living in urban areas, improving productivity “ONE OF THE OTHER MAJOR is highly dependent on the efficient movement of goods and CHALLENGES WE FACE IS DRIVING people. IMPROVEMENTS IN SAFETY OUTCOMES. 1,600 PEOPLE DIE A YEAR Productivity ON AUSTRALIA’S ROADS—OVER 1,700 “Over the last 10 years, Australia has experienced ACROSS THE ENTIRE TRANSPORT unprecedented economic growth, but productivity has slowed; INDUSTRY.” Australia’s productivity growth has averaged almost zero over the last five years,” said Mr Dimopoulos.

“We need to target reform to sectors of the economy that will Energy and environmental sustainability, speciﬁcally the deliver the greatest productivity growth. The Productivity escalation of global warming and climate change, was also put Commission report shows that improving the efﬁciency of forth as an issue that needs to be resolved in the process of energy and transport infrastructure could increase GDP by increasing productivity globally. nearly two per cent. The transport industry is integral to lifting the productivity and supporting the growth of the whole “Transport is one of the biggest emitters (14 per cent) in the economy.” economy and is one of the fastest growing contributors—the transport industry is 97 per cent reliant on oil,” he said.

National challenges “But look 40 years ahead—oil use is only going to increase as Mr Dimopoulos highlighted a number of other policy challenges there are more cars and trucks on the road, but oil production that the nation will have to overcome in order to grow is predicted to drop from the current 85 million barrels per day productivity, starting with urban mobility and congestion. to around 55 million barrels per day in 10 years’ time. Yet demand for oil in 10 years’ time is expected to exceed 100 Mr Dimopolous spoke about Australia’s projected population million barrels per day.”

86 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

Mr Dimopolous said that Australia is currently self-sufficient for and bedded down the national regulators we should consider around 50 per cent of its oil needs, but by 2030 that is the next step towards one single land transport regulator.” expected to drop to 20 per cent. Mr Dimopoulos said this regulator could bring together all land “One of the other major challenges we face is driving transport modes—road, rail and intermodal transport, and all improvements in safety outcomes. 1,600 people die a year on areas of regulation—economic, environmental and safety. Australia’s roads—over 1,700 across the entire transport industry.” “One land transport regulator would finally mean that transport decisions were made looking at the whole network,” he said. “It “In the last 12 months, around 200 people have died in heavy would mean that the right mode would be used for the right job vehicle accidents. This is unacceptable and it needs to stop. without any price or efficiency distortions.” The road toll not only impacts thousands of Australian families and communities, it costs around $18 billion to the economy.” Safety is a key concern for ATC, and ‘Vision Zero’ is one of its key plans for improving safety in the transport industry. Whilst these are the challenges the nation is aware of at present, the future could bring many more unknowns. “In 50 years there is no reason why we cannot aspire to Vision Zero being a reality for the transport sector. Over several “To reform the transport industry we need to have a vision of decades, safety in the transport industry has improved, and what we all want our industry to look, function and feel like in governments have undertaken significant reforms to drive 20 or 50 years’ time.” cultural change, but more needs to be done.”

“In the future, I want to see a transport that has an overriding Long-term vision for transport industry cultural commitment to safety being the number one priority. I Mr Dimopoulos outlined the National Transport Commission’s would like all business decisions to take into account safety vision for the transport industry. ﬁrst—a complete safe systems approach.

“There have been many achievements by governments and “By 2050 I hope that the transport industry will have a level of transport ministers in recent years to make structural changes sophistication to be taking these things into account and living to transport and the broader economy.” the Vision Zero philosophy.”

He outlined to attendees the positive steps that have been Mr Dimopoulos spoke at length about the future of regulation, taken to lay the foundations for the coming decades, and indicating that a completely self-regulating transport industry is spoke about the establishment of Infrastructure Australia to achievable in just 30 years’ time. provide a transparent framework for national infrastructure investment. Mr Dimopoulos also ﬂagged the establishment of the Building Australia Fund to fund critical national infrastructure and the endorsement by ATC and COAG of the establishment of single national regulators for heavy vehicles, “BY 2050 I HOPE THAT THE TRANSPORT rail safety and maritime as important steps for Australia’s T & L INDUSTRY WILL HAVE A LEVEL OF industry. SOPHISTICATION TO BE TAKING “I would like to see a truly national transport industry,” he said. THESE THINGS INTO ACCOUNT AND “A transport industry that is able to operate across borders LIVING THE VISION ZERO under one single set of laws. Transport operators, road or rail, PHILOSOPHY.” who don’t have to swap radios, use a different fatigue hours regime or de-couple their trailers at border crossings. A ‘national’ network of roads, rail networks, ports and shipping lanes.” “I want to see the amount of regulation being simple and no “I would also like to see a transport system that is fully more than necessary to support safety and economic integrated. Establishing national regulators for heavy vehicle, outcomes. We don’t want to have more regulation, but simpler rail safety and maritime are monumental steps for which and better regulation. Less is more,” he said. governments and industry should be congratulated. “Many of the reforms put in place in recent decades have tried “They are going to be the building block for future national to move the industry towards accreditation and a more reforms, but I don’t see that we should stop there. When sophisticated risk management approach in order to reduce governments and industry have successfully transitioned to the amount of prescriptive regulation needed.

87 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

“This is starting to flow through the industry but at this stage it “A national law administered by one regulator will cut is mostly the bigger end of town that can afford to put in place unnecessary red tape for national and interstate operators,” he the kinds of risk management systems that are needed. said, adding that variations to national law will have to be justified by delivering better productivity. “But in 30 years time, it is my vision that all of industry will be there; that the culture of the industry will have changed “The NTC is also working on developing the new rail safety significantly enough that it can be relied on to self-regulate and regulation, to be administered by the national rail safety appropriately manage risks in their own businesses.” regulator and expected to deliver $56 million worth of productivity benefits. Mr Dimopoulos highlighted the important role played by the ALC in improving levels of self-regulation in the industry. He “It will mean a national safety culture, shared learnings on said that The Retail Logistics Code of Conduct, an important safety across the country and a reduction in red tape and building block towards self-regulation, has been an enormous costly compliance confusion. achievement and shows what can be achieved when industry works together. Pricing The ATC also aspires to accessible, networked cities, and Mr The NTC is also working on a project to unlock the productivity Dimopoulos told the delegates that there is no reason Australia in roads through pricing. The COAG Road Reform Plan looks should not aspire to world leading levels of public transport use at promoting the more efficient, productive and sustainable provision and use of freight infrastructure and ensuring that “I want to see the development of freight strategies and ports heavy vehicle road prices encourage this. strategies go hand in hand with the development of a moving people strategy,” he said. “This would mean an interconnected and integrated system of public transport that was efficient, accessible and timely.” “IT WILL MEAN A NATIONAL SAFETY Building blocks CULTURE, SHARED LEARNINGS ON “What I’ve outlined might sound unrealistic. Transport and SAFETY ACROSS THE COUNTRY AND logistics has generally lagged behind other parts of the A REDUCTION IN RED TAPE AND economy in embracing structural and regulatory reform, and COSTLY COMPLIANCE CONFUSION. public transport networks in our big cities seem to struggle with our current population.

“However, the Australian Transport Council, the NTC and groups like the ALC are already working hard on a number of “Road pricing reform is about making sure that the money gets projects and initiatives that are critical building blocks to invested back into the road network where it is needed. It’s improving productivity and reaching the vision for the transport about providing demand signals for which parts of the network industry. need improving or extending. It is about making sure that what heavy vehicles pay goes to the parts of the network that heavy National regulators vehicles want to use.

Mr Dimopoulos said that reducing the regulatory burden on “This is good for industry. It is demand-driven and will provide transport businesses and industry harmonisation were key to governments with better information on where the roads need improving the industry’s productivity. to go or be improved, “ he said. “My vision is that a truck or train driver can move seamlessly from one side or end of this country to the other. That they only Telematics have to follow one law, get trained through one system, and Discussing the impact of technology in improving productivity get registered only once. safety and efﬁciency of the transport industry was high on Mr “While the past 20 years have seen signiﬁcant improvement Dimopoulos’ wish list. towards national harmonisation of road and rail laws, the “The transport industry has not been fast on the uptake of new agreement last year to establish single national regulators for and improved technologies, but this is changing. road, rail and maritime is an historic achievement for the industry. “Modern supply chains are incredibly technologically

88 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

sophisticated. One pair of jeans can be tracked from the “These are the building blocks that governments, with industry factory, on a truck, through ports, on ships, and to stores. and unions, need to bring these things to fruition and deliver Trucks are a part of that supply chain and need to help ‘add the on-the-ground outcomes.” value’ to this process.

“But technology is not just limited to helping supply chains; NTC review technology helps businesses better manage safety and The NTC is reviewed every six years, and is working with environmental obligations. industry and governments to meet the 2050 vision.

“The NTC will shortly release a telematics strategy for Key recommendations that were agreed upon in the last review consultation with industry and governments. The core principle in December last year were that the NTC: is that the increased uptake of technology in the transport industry will deliver important productivity, efﬁciency, safety and » play a bigger role in the implementation of reforms to environmental improvements.” deliver on-the-ground outcomes; » focus on a list of high-priority projects; and According to Mr Dimopoulos, this strategy looks at how governments and industry can work together to ensure that » become a centre of excellence in transport regulatory industry has the clarity needed to invest in telematics. and operational reform. “We are now undertaking the organisational and operational Higher productivity vehicles changes we need to make to give effect to these recommendations. These changes will mean that the NTC can Along with the telematics strategy the NTC will also release a rightly focus on making sure the work we do actually delivers regulatory impact statement for improvements to the the results on the ground.” performance-based standards scheme, a system that allows higher productivity vehicles to gain access to the road network. Mr Dimopoulos said that the NTC is playing a leading role in three COAG reforms, the national regulators and the pricing “This draft RIS recommends that governments agree to move reform. to national assessment and access system utilising the national heavy vehicle law and single heavy vehicle regulator to improve “These are game-changing reforms that need to be done well, national consistency and certainty of access. thoroughly and right. We are committed to delivering these reforms. “This RIS will be going out for consultation shortly and we look forward to working with industry to keep the pressure up to make this reform deliver on the ground.” Mr Dimopoulos told attendees about the recently-released NTC “THESE ARE THE BUILDING BLOCKS interactive web-based PBS mapping portal, which provides a THAT GOVERNMENTS, WITH national view of the road network, and which has allowed INDUSTRY AND UNIONS, NEED TO operators to increase their productivity by enhancing their ability to plan freight routes and determine quickly where BRING THESE THINGS TO FRUITION potential ‘last mile’ issues may occur. AND DELIVER THE ON-THE-GROUND OUTCOMES.” Ports The biggest of Australia’s 71 ports are located in our capital cities, and if current growth rates continue, the number of TEU’s (intermodal shipping containers) will require an extra 50 “Looking at the transport industry from the outside you might berths by 2045. think—how can we make this industry more productive? Trucks can’t go fast, things can’t zap through the air magically. Mr Dimopoulos posed the question: “How are we going to move these containers and where are we going to build these “But there is enormous opportunity within transport to drive berths?” productivity improvements, and we have now commenced that journey with a number of historical reforms. But governments “Infrastructure Australia and NTC are currently working to can’t do this alone—industry needs to do some heavy lifting develop a strategy that looks at how the land side links of ports too.” can be planned and developed to reduce bottlenecks and congestion around ports.

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90 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

HOW COMPETITION LAW SUPPORTS TRANSPORT AND LOGISTICS SOLUTIONS By Graeme Samuel, Chairman, Australian Competition and Consumer Commission (ACCC)

In his address to the delegates at the ALC Annual Forum, ‘Driving a Seamless Supply Chain’, Graeme Samuel, Chairman of the Australian Competition and Consumer Commission (ACCC), acknowledged the work of the Australian Logistics Council in identifying blockages in Australia’s transport supply chains and outlines how competition law is an important contributor to efﬁcient supply chains.

Introduction that the solutions that are proposed are consistent with the Trade Practices Act. Undoubtedly, the ACCC and the industry share some common goals—the ACCC is mandated with enhancing the welfare of If parties are interested in coming together to discuss possible Australians through the promotion of vigorous but fair solutions, it’s a good idea to have an experienced trade competition and to that end, we want to see efﬁcient transport practices lawyer on hand to advise on setting the ground rules supply chains and the removal of any blockages. for such discussions.

I wish to address some misconceptions about how competition There are serious consequences for breaching the Act, law works and allay any fears that such laws act as constraints especially those companies and employees found to have when developing solutions to supply chain efficiency problems. engaged in cartel conduct. I’ll also discuss what measures the ACCC has in place to remove other blockages in supply chains and instances where we have authorised anti-competitive arrangements on the basis that the net public benefit outweighs any detriment WHAT I CAN MAKE CLEAR IS THAT THE caused. ACCC IS WILLING AND ABLE TO A key example is the Hunter Valley authorisation, which I’ll FACILITATE INDUSTRY COOPERATION examine in some detail shortly. TO COME UP WITH EFFECTIVE SOLUTIONS TO SUPPLY CHAIN Competition law in action BLOCKAGES. Work undertaken by the National Transport Commission has identified measures that could improve the operation and performance of Australia’s national freight supply chains, focusing on greater coordination and improved information From July 24 last year, a criminal cartel offence was introduced, sharing arrangements between supply chain participants. alongside the existing civil prohibition, providing substantial Yet there is some concern that such activities may breach the penalties including imprisonment for cartelists. Trade Practices Act. I’m sure we’ll find out more as the year If potential for a breach exists, but the parties consider that continues. there are offsetting public benefits, then you should come and What I can make clear is that the ACCC is willing and able to talk to the ACCC, to determine whether the authorisation or facilitate industry cooperation to come up with effective notification process may be appropriate. This will provide solutions to supply chain blockages. immunity from legal action for the anti-competitive conduct.

However, in doing so, our fundamental goal will be to ensure For example, in matters previously considered by the ACCC,

91 DRIVING A SEAMLESS SUPPLY CHAIN—2010 ALC ANNUAL FORUM

parties have claimed that greater supply chain coordination worked with industry to facilitate a more effective end-to-end provides offsetting efﬁciency beneﬁts. supply chain; and minimise losses through capacity constraints and ship queues. The ACCC can then conduct a public consultation, inviting submissions from a range of interested parties about the In the Hunter Valley, multiple parties are involved in facilitating a proposed arrangements. joint solution up and down the chain, from coal mine to ship.

The ACCC then issues a draft decision and invites further This includes coal producers, port operators, the Australian Rail submissions before issuing its ﬁnal decision within six months. Track Corporation, the above-rail operators and the Hunter Valley Coal Chain Coordinator. It’s also worth considering whether, before embarking on an authorisation application, there is some governance The ACCC has been involved both in authorising long-term arrangement available—such as an independent capacity agreements between the parties for effective logistical coordinator—that would deal with concerns about lessening management of the chain, and in assessing the terms of competition but still deliver the desired beneﬁts. access to the rail track infrastructure.

In any case, I cannot stress enough the importance of In all cases, the ACCC has made it clear that it considers speaking to the ACCC at an early stage. efﬁcient management of the supply chain as an important factor in any approval. Let the recent settlement of court action against Australian Amalgamated Terminals (AAT) be a ‘warning’ to the industry— This is an example of an early approach by industry to the companies that give effect to cooperative agreements without ACCC leading to an efﬁcient solution to an ongoing supply such authorisation under Part VII of the Act face the very real chain problem. risk of such agreements being deemed anti-competitive and substantial penalties may follow. Before 2004, excess demand for coal loading services at the Newcastle port resulted in large vessel queues forming offshore, at times numbering 70 ships.

The capacity of the coal chain has not matched the demand for coal loading services and the result is that Australian coal BEFORE 2004, EXCESS DEMAND FOR producers pay significant demurrage charges. The loss, in COAL LOADING SERVICES AT THE terms of demurrage, amounted to in excess of $400 million NEWCASTLE PORT RESULTED IN dollars per annum. LARGE VESSEL QUEUES FORMING OFFSHORE, AT TIMES NUMBERING 70 The ACCC has been involved, through the authorisations process, in the Hunter Valley since early 2004. SHIPS. At that stage, the operator of the then only coal loader in Newcastle, Port Waratah Coal Services (PWCS), first sought authorisation for a queue management system (the ‘Capacity Balancing System’), which was designed to address the It is not the ACCC’s role to come up with solutions to fix supply imbalance between the demand for coal loading services at the chain problems. Instead the ACCC will always be available to Port of Newcastle and the capacity of the Hunter Valley coal examine whether those solutions driven by industry are chain. appropriate under the Act. While an interim authorisation was granted for this application In the ACCC’s experience, a cooperative arrangement is more in March 2004, an authorised Capacity Balancing System has likely to fully address supply chain coordination problems if it essentially been in operation at the Port of Newcastle. involves all key service providers in the chain. The ACCC always considered that these systems were in the Hunter Valley coal chain authorisation public interest as transitional measures only. A good case in point is the Hunter Valley coal chain, where the The ACCC foreshadowed that infrastructure capacity ACCC has had a role in both authorising the agreements expansions alone would not solve the problem in the Hunter arrived at by the port operators, and ruling on access Valley. arrangements proposed by the track operator. There were a number of underlying structural, regulatory and It is an excellent example of a system where the ACCC has contractual issues in the coal chain that appeared to be

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contributing to the ongoing capacity imbalance. This will ensure that future capacity will be available as the demand for it arises. Firstly, the common user provisions in the PWCS lease with the NSW Government had prevented it from signing long-term contracts. Assessing access undertakings Of course, the port terminals are only one part of the end-to- Secondly, the various operators of the segments of the coal end supply chain in the Hunter Valley. chain had been entering into contracts based on assessments of their own capacity without reference to the capacity of the The ACCC is currently assessing the Australian Rail Track coal chain as a whole. Corporation’s (ARTC) proposed access undertaking under Part IIIA of the Trade Practices Act for the rail network in the Hunter As a result, contracts had been written for volumes of coal that Valley. the coal chain as a whole could not deliver and signiﬁcant vessel queues formed offshore. This forms a key component of the long-term solution in the Hunter Valley. As the applicants, over several years, sought reauthorisation of various capacity balancing systems, the ACCC became In considering this undertaking, the ACCC is looking at the increasingly concerned that the operation of these systems extent to which ARTC’s arrangements work together with was reducing incentives for the industry to develop and those at the port to ensure functioning contractual alignment implement long-term strategies to address the capacity constraints.

These concerns also arose at Queensland’s Dalrymple Bay Coal Terminal—so much so that in early 2009 we proposed to THE ACCC IS CURRENTLY ASSESSING deny authorisation of that terminal’s capacity balancing system. THE AUSTRALIAN RAIL TRACK CORPORATION’S (ARTC) PROPOSED Our concern was that their proposal did not represent a long- term solution to the capacity constraints in the Goonyella coal ACCESS UNDERTAKING UNDER PART chain. IIIA OF THE TRADE PRACTICES ACT FOR THE RAIL NETWORK IN THE The industry later withdrew the application. HUNTER VALLEY. Back in the Hunter Valley however, on 9 December last year, the ACCC granted authorisation to PWCS, Newcastle Port Corporation and the Newcastle Coal Infrastructure Group (NCIG—new terminal at the port, planned to begin operating across the entire coal chain. later this year). In particular, on 10 February the ACCC issued a position paper The authorisation approved the long-term Capacity Framework on ARTC’s access undertaking, setting out its preliminary views Arrangements at the Port of Newcastle until 31 December on matters other than price. 2024. These arrangements have allowed producers to sign long-term export contracts with PWCS for the first time, which We’ve made our view clear that an efficient supply chain is in will underpin future investment decisions to expand capacity. the national interest, and that any track access arrangements must provide for coordination of the supply chain from end-to- They have also established a framework which should assist end. producers to align their contracts with track and rail operators in the Hunter Valley, and have supported centralised modelling Our view is that ARTC must include standard terms in all its of system capacity and monitoring of performance standards, contracts with coal producers that allow it and the Hunter which should prevent excessive vessel queues forming offshore Valley Coal Chain Coordinator to manage the track network in the new contracting environment. efficiently, and that we won’t allow ARTC and any individual coal producer to contract out of those terms. The ACCC considered that the Capacity Framework Arrangements are likely to generate significant public benefits That includes requiring a coal producer who is exporting because they enable coal producers to sign long-term coal through the Newcastle ports to have network exit capacity at export contracts at the port, which establishes a commercial the ports before track capacity is allocated to it; the rules about framework to support accurate and timely investment how train paths are allocated; management of shortfalls in decisions in the Hunter Valley coal chain. capacity; trading of capacity; and resumption of unused

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capacity that is being hoarded. Therefore, accompanying liberalisation of the wheat export markets was a requirement that the port terminal operators We expect ARTC to work closely with the Hunter Valley Coal have arrangements for other wheat exporters to access their Chain Coordinator on the use of these provisions. grain ports accepted by the ACCC.

Of course, the industry has to make the supply chain work. The The ACCC worked with the port terminal operators over the ACCC will be able to arbitrate if there is ever a dispute. course of last year to develop suitable access arrangements.

But the ACCC recognises, and seeks to promote, the role that During this process, the ACCC has been careful to find a the Hunter Valley Coal Chain Coordinator, coal producers, balance that addresses the possibility of discriminatory above-rail operators, port operators and ARTC itself play in the conduct, but leaves the port terminal operators with sufficient efficient functioning of the supply chain. operational flexibility to operate the supply chains efficiently.

The ACCC aims to facilitate an acceptable outcome to support The arrangements that were accepted by the ACCC have the necessary infrastructure. unlocked bottlenecks at grain ports. There are now 28 accredited wheat exporters, at least 15 of whom are currently A draft decision is imminent, and we are taking a close look at active. This represents more competition and a greater choice a range of factors in determining whether the undertaking, as for farmers when selling their wheat. submitted, balances the interests of the parties while providing The ACCC has also allowed a notification from CBH in relation to Grain Express in WA to remain, recognising the public interest in an efficient supply chain for all grains in WA. LAST FINANCIAL YEAR, THE TWO Containerised freight (waterside) INCUMBENT STEVEDORES ACHIEVED RATES OF RETURN OF NEARLY 18 PER Similarly, the ACCC is no stranger to the world of supply chains CENT, MORE THAN THE AVERAGE for containerised freight. RETURN ON ASSETS FOR ASX200 For many years now, the ACCC has consistently raised COMPANIES (NINE PER CENT). concerns about the lack of competition between the two stevedores (now owned by Asciano and DP World) and the reduced incentives for the duopoly to respond efficiently to the requirements of their users. pricing certainty needed for further investment to address blockages in the supply chain. Container stevedoring is a vital part of our export and import supply chains through Australia’s major container ports in Brisbane, Sydney and Melbourne. Grain These ports account for more than 80 per cent of national Next, the ACCC has had a role in parts of the supply chain in container traffic. wheat export facilities. Over the last decade, there has been strong growth in the Our role arose as a part of the removal of AWB’s single-desk demand for stevedoring services, but as the industry has for the export of Australian wheat and the desire for remained a duopoly, opportunities for new entrants have been competition to be introduced into wheat export and marketing. rare and unsuccessful. However, there was concern that, in liberalising the wheat Last financial year, the two incumbent stevedores achieved export market, AWB’s monopoly could be replaced by three rates of return of nearly 18 per cent, more than the average ‘regional monopolies’. return on assets for ASX200 companies (nine per cent). These were said to be the three grain port operators that own, Demand for stevedoring services, while flat in 2008-09, is respectively, the WA, SA and east coast grain terminals and expected to pick up as the domestic economy recovers from who are also now accredited wheat exporters. the global economic slowdown, and expected growth in The concern was that the port terminal operators might container traffic over the next decade provides a good discriminate in favour of their own wheat exporting arms—for opportunity for Australian stevedoring to become more example, in the allocation of shipping slots, or through competitive. discriminatory pricing.

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Of course, the more competitive and productive our stevedores should be viewed with some well-honed scepticism. are, the more competitive Australian exports are on world markets, and the more resilient our economy is to global Containerised freight (landside) shocks. While the prospect of more terminal operators and greater In its 2006 paper, the Productivity Commission suggested competition is good news for shipping lines and the Australian productivity improvements of nearly 10 per cent were possible exporters and importers that rely on them, the New South at Australia’s container ports, a saving of about $160 million in Wales Independent Pricing and Regulatory Tribunal (IPART) 2005-06 dollar terms. observed that once containers are on the wharf each stevedore effectively becomes a monopoly. I am pleased to say that the prospect of competition in each of the three major ports is real with changes ahead to break the This has the potential to create its own difficulties in the search decades-long duopoly. for supply chain efficiency. A variety of approaches have been adopted to improve landside efficiency at Australia’s major Indeed, allowing a third stevedoring company to compete container terminals. could potentially slash millions of dollars of Australia’s import and export costs. In some ports, such as Melbourne, some landside supply chain efficiencies appear to have been achieved through a At the Port of Brisbane, Hutchison Port Holdings has been cooperative approach. appointed to operate two new container berths commencing in 2012. At other ports, such as Port Botany, cooperative approaches have not been as successful and the NSW Government has In December last year, the NSW Government made its long- implemented a regulatory regime that can impose certain awaited announcement in which it also appointed Hutchison to arrangements on supply chains. operate a third container terminal at Port Botany with operations due to commence around 2012. I’d like to acknowledge efforts to get the parties together on

For a while now, the spotlight has been on Australia’s largest container port, Melbourne, to make a clear commitment about the role that competition can play in meeting Australia’s future stevedoring needs. IN SOME PORTS, SUCH AS The Victorian Government announced in August 2009 that it MELBOURNE, SOME LANDSIDE SUPPLY would ‘test’ the market for interest in an initial module of additional stevedoring capacity at Webb Dock ahead of 2017. CHAIN EFFICIENCIES APPEAR TO HAVE BEEN ACHIEVED THROUGH A I note recent media reports that the Victorian Government is COOPERATIVE APPROACH. expected to make an announcement to bring forward plans to expand capacity at Melbourne’s Webb Dock.

While some recent reports have been prepared to mention potential commencement dates for a third stevedore by the middle of this decade, the ACCC remains hopeful that at some road and rail land access booking, and we’ve already had early point, sooner rather than later, increased competition will discussions with them. ultimately emerge in Melbourne with the associated beneﬁts right through the supply chain. For example, Sydney Ports Corporation approached the ACCC at an early stage in response to the recommendations of the State governments and port managers are to be congratulated IPART report in late 2007, enabling useful exchanges and for taking tough decisions not only in their state’s best interests dialogue in relation to proposed initiatives to address truck but also considering the broader national interest. access improvements at Port Botany.

A growing stevedoring market provides a unique opportunity We welcome the discussions we’ve had with both individual for a new entrant to establish itself and, through more ports and with Ports Australia. competition, lift the performance of the whole industry.

I must note that the existing stevedores have been quoted as Airports saying that they welcome competition—but not right now. This For high value products that must be moved quickly, express

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logistics and air freight services are critical. At other airports, while their prices are not subject to regulation, the government continues to scrutinise the airports’ Australia’s major airports play a pivotal role in providing the performance and expects the airports to price, invest and infrastructure that supports express air freight. operate efﬁciently.

The ACCC has a role in reporting each year on the It is therefore incumbent upon the airports to deal with their performance of Australia’s five major capital city airports. users, including their freight and logistics customers, in a fair and reasonable way. While the emphasis of this analysis is on services for passenger transport, there are implications for the express freight sector Failure to do so carries the threat of declaration/arbitration. whose cargo flies in the bellies of passenger planes—and whose freighters depend on the airports delivering runway and terminal capacity in a timely and efficient way. Conclusion The significance of the efficiency of Australia’s transport supply There is broad recognition that the major airports have market chains for exports and economic growth and prosperity cannot power. be understated.

The ACCC’s fundamental concern is the interests of a vigorous but fair marketplace, which is in the best interests of consumers and the logistics industry.

FINALLY, LET ME SUGGEST THAT Innovative solutions to transport supply chain bottlenecks will COMPETITION LAW, FAR FROM invariably involve some coordination and cooperation between PUTTING THE BRAKES ON SOLUTIONS, industry players and this is not itself a problem if such CAN IN FACT HELP OIL THE WHEELS TO negotiations are done with the Trade Practices Act in mind. GET VITAL TRANSPORT CHAINS I encourage seeking the advice of an experienced trade WORKING WELL. practices solicitor before discussions with the ACCC very early in the process.

Indeed, far from preventing efficient outcomes, the ACCC has itself taken steps against blockages in supply chains—just look I think the ACCC’s views on what that has meant for services at our work with stevedoring. like airport car parking, for example, are well known. In light of Once again, I’d like to commend the Australian Logistics ongoing price increases, the ACCC maintains its view that Council and the various industry peak bodies—for example, airport car parking prices are consistent with charges reflecting Ports Australia—for their ongoing efforts to identify practical an element of monopoly rent. approaches to logistics and supply chain management Although a number of alternatives to onsite airport car parking improvement issues. have been observed by the ACCC, the airports are in a position Their role in educating and encouraging industry participants to to set car parking prices above an efficient level by controlling bring about long-term productivity enhancements must be the conditions of landside access to terminal facilities. acknowledged. But in relation to freight carried on passenger planes at Sydney Finally, let me suggest that competition law, far from putting the Airport, domestic airside services have been declared and the brakes on solutions, can in fact help oil the wheels to get vital ACCC is able to arbitrate disputes. transport chains working well.

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MEETING AUSTRALIA’S FREIGHT INFRASTRUCTURE CHALLENGE By Brendan Lyon, Executive Director, Infrastructure Partnerships Australia

True nation building is about getting the whole of Australia to freight infrastructure grants to achieving key reforms across the work together as one nation—not as a series of states. It’s entire freight market. about making Australia’s freight market greater than the sum of its parts. It has worked before; linking ﬁnancial incentive to tough productivity-based reforms served the nation well under the In his address to the 2010 Australian Logistics Council Forum, national competition policies framework, and there is no reason Brendan Lyon, Executive Director of Infrastructure Partnerships why Australia cannot embrace tough reform once more. Australia (IPA), put it plainly, announcing that “The growth in the freight task across Australia is not only a challenge that must But ‘tough reform’ means both addressing the tough questions be seen in a national context, but the size and signiﬁcance of and following through. the transport and logistics sector demands nothing less than a As valid as demand shaping infrastructure may be, there is also national solution.” (Figure 1). a lot of tinkering at the edges of the problem, so that it might ‘appear’ better, with the fundamentals being deftly avoided 2000 once again. According to Mr Lyon, “There will need to be 1800 1540 substantial and sustained investment in major infrastructure 2.5% 1600 pa projects, linked in with a cohesive national freight strategy. An 1400 1200 accelerated and enlarged role for the federal government will 2.75% 1200 pa 917 be absolutely critical.” 1000 3.0% 800 683 pa The fact is that a lot of countries we might have thought we 600 378 (2000) compared pretty well against are in fact doing it better than we billion tonne - kilometres 400 are. Mr Lyon presented a photo of a shiny new postal freight 200 train being operated on France’s TGV network, operating at 0 speeds of 270kph (Figure 2). TGV is now looking at expanding

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 the role of general freight across the high-speed rail network.

Figure 1 Emphasising that the case for focused national leadership in the planning and regulation of freight transport is nothing short of compelling, Mr Lyon predicted that the economic and environmental dividends will be signiﬁcant, and that the transport and logistics industry has to take on the responsibility of playing a greater role in driving Australia’s economy forward.

IPA has long argued for a united and uniting national freight strategy since its inception in 2005, and emphasises that achieving this will require the appointment of a single body with both the responsibility and authority for planning real world outcomes.

What is needed is a body that will ﬁnally deliver clear national Figure 2 leadership and act as the champion for achieving holistic In Australia, we run the very real risk of running right at the national freight market regulation reforms. Cooperation with the back of the ﬁeld in the ‘visionary’ stakes, and well and truly states is obviously essential to achieving a genuinely committed losing the race for genuinely visionary thinking about the consensus, so this body should be empowered to link future transformation of Australia’s freight infrastructure. Years of

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underinvestment by all levels of government requires urgent Its research found that the distance and volume of freight and well-considered redress. moved through and across Australia is set to double by 2020 to 683 billion tonne kilometres, and that the freight task will The focus of the IPA is on developing industry policy across the treble by 2050, at 1,540 billion tonne kilometres per year. entire infrastructure sector. As the nation’s peak infrastructure industry association, IPA represents over 150 of the nation’s As Figure 3 shows, this growth will be largely driven by non- leading public and private sector chief executives. A key bulk container freight. IPA forecasts indicate containerised objective is to elevate the public policy debate to thoroughly freight growth of almost 250 per cent, from 182 billion tonne and extensively canvass the options and advocate solutions. kilometres in 2008 to 631 billion tonne kilometres in 2050.

One of the tasks is to strip off the ‘national blinkers’ and look 1000 beyond immediate political expediency to achieve real world 900 909 change in attitudes, policy, and on the ground. IPA has to 800 change the national mindset and generate genuine 700 engagement by many stakeholders for the task ahead. 600 631 500 In transport, IPA has a multi-modal approach looking at both 400 the freight and passenger tasks. Recent work has included: 300 321 billion tonne - kilometres 200 » The landmark paper, Meeting the 2050 Freight 100 182 Challenge, which modelled future freight growth to the 0 middle of the century, as well as work around a 2008 2050 network-based tolling system on Sydney’s motorways non-bulk bulk Figure 3 » a major paper on improving transport governance and planning arrangements in South East Queensland However, bulk freight is also set to grow, albeit at a lower rate » research (now classiﬁed as ‘purely academic’) on an than non-bulk freight as bulk exports ease as a proportion of the overall freight task. Bulk freight is expected to increase by existing 25-year NSW transport blueprint. 183 per cent from 321 billion tonne kilometres in 2008 to 909 IPA has also recently completed a major work on the beneﬁts, billion tonne kilometres in 2050. costs and opportunities of a national road-pricing scheme that examines a national road access price from a transport management as well as a revenue aspect.

Important among the range of issues is the need to ﬁnally THE CHALLENGES OF DEVELOPING AN deliver a seamless national supply chain. According to Mr Lyon, EFFECTIVE AND COMPREHENSIVE “Australia’s transport and logistics industry is the backbone that NATIONAL FREIGHT SYSTEM (WITH underpins the health, wealth and productivity of the national economy. Freight is too often the forgotten end of the national APPROPRIATE INTERNATIONAL infrastructure debate, but its importance cannot be CAPABILITIES) ARE IMMENSE. overstated.”

The transport and logistics industry generates more than 14 per cent of Australia’s gross domestic product and is worth more than $150 billion per annum to the economy, while These are signiﬁcant numbers that show truly dramatic supporting more than a million jobs across the nation. increases, according to Mr Lyon. “Australia is facing a profound infrastructure challenge, so there is no getting away from Mr Lyon is adamant that the ‘freight debate’ should be a vital signiﬁcant reform as well as precisely targeted and sustained part of the national conversation and other policy-making investment in order to sustain living standards and productivity initiatives. Freight issues need to be front and centre of that growth.” debate. “Australia needs to genuinely and radically overhaul its The challenges of developing an effective and comprehensive approach to meet the freight challenge,” says Mr Lyon, adding, national freight system (with appropriate international “The rail sector provides a telling example of the lack of national capabilities) are immense. consistency hampering the freight market”.

Last year IPA released its modelling of the freight task to 2050. IPA’s research points to the extraordinary legislative and

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regulatory burden hampering the rail market, where an operator nowhere is the growth challenge more evident than on has to comply with: Australia’s economic arteries—our roads, rail and ports.

» seven rail safety regulators with nine legislative and “Transport investment must be wide-ranging and sustained, regulatory codes; we must invest well in our ports, we must design and fund new » three transport accident investigators; intermodal networks, such as the too-long delayed Moorebank facility,” says Mr Lyon. » 15 OHS Acts; » six access regulators; and » 75 environmental management acts.

It is unlikely that France’s TGV has to dodge so many obstacles WE CAN MAKE INROADS BY BETTER before it can get up to speed. MANAGING INFRASTRUCTURE. MEASURES LIKE TIME OF DAY ACCESS “It does not have to be this way in Australia—and the PRICING ENCOURAGE UTILISATION OF deadweight costs to the economy are enormous,” says Mr Lyon. TRANSPORT INFRASTRUCTURE IN PERIODS OF SPARE CAPACITY. Australia’s national freight network is part of a much longer global logistics chain, and we need to recognise the need to address fragmented regulatory and planning frameworks.

Under the status quo, there are a large number of federal “We must deliver ‘missing links’ on our road networks like bodies that provide leadership or coordinate policy, regulation Melbourne’s Westlink and Sydney’s M4 East, F6 and F3 or investment for different aspects of the transport sector. Connection, and it’s pretty obvious that Australia should by now have world-class highways to connect our eastern These include: capitals. We must invest in new rail capacity which grade separates passenger services from freight, where market » Department of Infrastructure and Transport demands and operational issues are worlds apart.“ » Australian Transport Council (ATC) “But most importantly of all,” Mr Lyon continues, “Australia » National Transport Commission (NTC) needs to bring a whole of network approach to planning the » Bureau of Infrastructure, Transport and Regional right infrastructure, in the right places, and at the right time. Economics (BITRE); Roads, rail and sea freight will all play their part in meeting the » AusRoads tripling in the freight task but we need a consistent national infrastructure plan to ensure we’re investing in the best projects » Competition and Consumer Commission (ACCC) to meet national objectives as we go along.” » Infrastructure Australia. It is self evident that a tripling in the volume and distance of And there are dozens more at a state level. Each of these freight will demand three times the capacity across our port, bodies has a differing responsibility for parts of the supply intermodal, rail and road networks, but new capacity is only chain, but no one body has the responsibility to plan for the part of the challenge. entirety of the national freight market. We can make inroads by better managing infrastructure. “That is a major weakness in our Federation that now requires Measures like time of day access pricing encourage utilisation redress,” says Mr Lyon. How does anyone design an effective of transport infrastructure in periods of spare capacity. On our and efficient system with so many interests to account to? rail network, we need to accelerate track upgrades and new routes like a more efficient north south rail corridor. The Already, in the broadest terms, Australia faces a massive Australian Rail Track Corporation has achieved much, but infrastructure renewal task. Cost estimates range up to $770 many more passing loops, re-alignment and re-sleepering billion in the current decade alone. When overlaid by population remains to be done. forecasts that see Sydney and Melbourne housing more than seven million people each, and continued rapid growth in Figure 4 shows a schematic of one of the most important rail South East Queensland and Western Australia, current projects—the Automatic Train Management System. The ATMS estimates are likely to prove conservative. significantly reduces the clearways between trains, boosting the productivity and capacity of the entire network. It won’t be easy—but it will be worth it if the vision, strategy and implementation are all carried through effectively. And

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capital expenditure, $ billion (F2008 prices) capital expenditure, 0 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 year, ended june Figure 5 And that means that Australia needs a considered, cohesive and uniting national freight infrastructure plan that will attract the investment and skills of the private sector all-the-more.

In addition to the national planning body, Australia must also have a national freight regulator, operating across all modes, to administer safety and environmental protection. This new Figure 4 freight regulator should also be tasked to conduct ongoing When you couple this sort of innovative project with initiatives reviews of the regulatory environment and to recommend like double-stacking freight trains and the delivery of new changes to reduce the regulatory burden. freight infrastructure projects as part of a national strategy, then Regulating across the whole sector—rail, heavy vehicles and we will begin to see real improvements in freight network coastal shipping—will deliver a joined-up, whole-of-network efficiency and national productivity. approach that ensures regulatory competitive neutrality across The cautionary note is that visionary planning is only useful if it modes. is backed up by rigorous delivery. A most significant challenge Some reform has already occurred, with separate rail, road and in renovating the national freight market will be harnessing vehicle regulators—and this is a positive step. But we need to efficient private investment in road, rail and intermodal assets. move beyond this mindset. Settling on models to better harness private investment in freight infrastructure is the key to successfully bridging the The reforms of the last decade and a half have seen efficiency transport infrastructure gap. increased by reform and innovation within modes. Now it is time to get bold about market-wide shaping in freight. Now it is “The chilling impact of the Sydney Metro cancellation on time for Australia to begin to regulate and plan for the whole of business confidence in the short term will be very significant,” the transport and logistics sector—for the entirety of the says Mr Lyon, “and Australia needs to adopt the kind of model national freight market. that ensures these disasters do not further tarnish the infrastructure market in this country. Investors in the next There remain many issues to attract the focus and attention of generation of national freight assets will require certainty and a policy makers and industry. While much work is being done in skilled partner.” earnest, further reform is urgently needed.

IPA’s modelling forecasts (Figure 5) indicate that the tripling in “Australia needs to evolve a system that allows us to meet key freight and growth in economic activity and population will national challenges head on,” says Mr Lyon, adding that require recurrent transport infrastructure investment to “Modest reform is not an option. Our engineers and quadruple to 2050, representing a recurrent annual investment constructors are up to the challenge … the rest of the nation of $62.5 billion per annum. needs to give them the opportunity to do their stuff.”

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